In recent years, international unilateralism and trade protectionism have risen, with trade frictions against China, while aluminum is the non-ferrous metals industry most affected by trade frictionvarieties. So far, there have been 47 trade investigations against The China aluminum industry, involving $6.8 billion in exports, according to the Commerce Department's Trade Relief Investigation Bureau. Trade friction object includes the European Union, the United States, Canada and other more than 40 countries and regions, product types from aluminum to aluminum products, aluminum-containing commodities spread, trade investigation means are no longer limited to anti-dumping and anti-subsidy ("double negative") investigation, some countries began to use their own bills to initiate related sanctions. Among them, Sino-US trade friction has become the world's largest trade conflict and the impact of the largest, especially in the past two years, China and the United States on imports to impose tariffs on a number of rounds of game, by the global attention.
The international division of labor and the positioning of supply and demand between China and the United States have actually determined the trade relationship between the two countries. In the case of aluminum, first of all, China is the world's largest producer and exporter of aluminum, while the United States is an important exporter of aluminum. In 2018, China's aluminum production was 35270kt, the world's largest, and 5207kt of aluminum exports accounted for 23% of the world's total export trade in aluminum. Despite the impact of sino-US trade frictions, China's exports of U.S. aluminum materials fell sharply in 2018, but also accounted for 6.5% of total exports (15.9% in 2017). Second, the U.S. aluminum consumption structure has a clear import dependence, more than 50% of the consumption of aluminum from imports. China is an important importer of aluminum, with the United States importing more than 30% of its global imports of aluminum from China in 2016-2017, with aluminum foil accounting for more than 50%. Of course, the United States also exports a large number of aluminum to China each year, and relatively high-end, the data shows that the amount of exports to China far exceeds the proportion of exports. For example, in 2018, the U.S. exported 22.7kt aluminum strips to China, or 2.7 percent of its total exports, while exports amounted to $150 million, or 14.3 percent of total exports, more than five times the total. The aluminum trade between China and the United States shows that the two sides are important trade objects, and the trade between the two countries is required by each other.
Since 2010, the United States has launched trade surveys on imports from China for a variety of reasons, including the "double anti", 332, 232 and 301 surveys on the aluminum industry.
The direct impact of Sino-US trade friction on China's aluminum industry is mainly reflected in the significant changeins in the scale and proportion of exports of goods to the United States under HS:76, especially all kinds of aluminum and aluminum products.
U.S. "double anti" sanctions impose high tariffs on aluminum profiles, aluminum foil and aluminum strips imported from China, causing exports to the U.S. to plummet. Exports of 8.0kt to the U.S. aluminum strip in 2011 fell to about 1.0 percent from 37 percent in 2010. Exports of U.S. aluminum foil in 2018 were 72.9kt, down 50.9% from the previous year, while exports of U.S. aluminum strips were 247.2kt, down 50.8%, and the share of U.S. aluminum foil and aluminum strip export markets is now down to about 5%. Exports of aluminum profiles after the "double negative" fell by 5.3% to the United States in the first half of 2019, despite a 10 per cent tariff imposed by the 232 survey. Aluminum powder exports fell by 53.0% in the first half of 2019 due to the 232 survey tariff suprejated by 10% tariff and $200 billion in commodity duty, while aluminum pipe exports fell by 8.7% in the first half due to the 10% tariff imposed by the 232 survey, but exports to the United States were relatively small due to the relatively small volume of exports from both commodities. In particular, aluminum tubes account for only 2.0%-4.0% of the U.S. export market, so the impact is relatively small.
There are many products in aluminum products, including all goods under sea tariff numberhHS: 7609 to 7616. The $50 billion and $200 billion tariff list includes most aluminum products, and monthly export data to the United States show that tariff increases have resulted in 13.7% and 11.4% of exports to the United States in the first half of 2019, respectively, and exports account for less than 15%. Exports of aluminum products to the United States are expected to decline further in the second half of 2019, driven by an increase in tariff suing rates of 25% in May and 30% in October.
In addition to the exempt portion, the $50 billion, $200 billion tariff list and the upcoming $300 billion tariff list essentially cover all exports to the United States, including aluminum-containing commodities such as cars, aluminum wheels and household appliances. According to incomplete statistics, China's annual export volume of aluminum in aluminum-containing commodities is close to aluminum products, and is also an important part of aluminum exports. Because of the many kinds of commodities involved, it is used as an example of trade friction on the indirect impact of trade friction on China's aluminum industry. China is the world's largest producer and exporter of household appliances, while the United States is the world's largest importer of household appliances. Since September 2018, U.S. tariffs on imports of air conditioners and refrigerators from China have led to a 11.5 percent year-on-year decline in air-conditioning exports to the U.S., an 18.9 percent decline in refrigerator exports in the first half of 2019, while washing machines that were not included in the $250 billion tariff list have bucked the trend by 22.9 percent. Exports of the three major household appliances to the United States show polarization. The inhibition effect of trade friction on the export of aluminum-containing commodities is also reflected in the aluminum alloy wheels. In 2018, China's exports to the United States aluminum alloy wheels 480kt, accounting for 47.8% of China's total exports, the market size of the first. Since December 2018, exports of aluminum alloy wheels to the United States have declined year-on-year, with exports to the United States in the first half of 2019 198kt, down 15.7% YoY, of which exports to the U.S. aluminum alloy wheels decreased by 24.9% YoY in June, down 19.9% YoY, due to the increasein tariff rate. China is the world's largest producer and export country of aluminum alloy wheels, the United States of America on China's aluminum alloy wheel export tariffs on the industry seriousimpact, and with the increase of tariff rate will continue to deteriorate.
As shown in Table 3, the trade survey and tariff increase carried out by the United States have had a significant adverse impact on China's aluminum exports, with the "double negative" being the most serious, and the impact of the 232 survey and the 301 survey tariff increase has been revealed and will have a long-term impact. With the continuous escalation of Sino-US trade friction, the scope of tariff increase saluaa is gradually expanding, coupled with tariff overlay, China's aluminum exports will be more affected.
So how much impact will the implementation of the $300 billion tariff on goods from September 1 stilettos and the 5% additional 5% tariff on goods from October 1st? The export size is relatively small and mainly for processing trade exports of recycled aluminum alloy; (2) the three major export aluminum has been subject to high "double negative" tariffs, 10%-15% tariff is relatively small, and aluminum line and aluminum tube exports to the United States are not large; (3) 300 billion U.S. dollars tariff list of China aluminum line, Aluminum pipe accessories, aluminum doors and windows, aluminum rubbing pots, etc. are the first tariff. Therefore, it is expected that the $300 billion tariff increase will have a relatively small direct impact on the export of unforged aluminum and aluminum alloys and aluminum, and will have a certain impact on the export of aluminum products, in particular by a further 5 per cent increase in the tariff rate from 1 October, and the expansion of the tariff range and the increase in the tax rate will exacerbate the unfavourable situation of exports of aluminum-containing commodities, This in turn will affect the indirect export of aluminum and domestic consumption. In June 2019, the World Bank cut its GDP growth forecast by 0.4 percentage points. According to 2018 China's real GDP and aluminum consumption intensity estimates, GDP growth is expected to decline less than the domestic consumption of about 180,000 tons of aluminum. In the past two years, China's aluminum consumption growth rate has slowed significantly, in 2018 only 0.8%. Trade frictions, while not the only factor contributing to the slowdown in aluminium consumption growth, will exacerbate this unfavourable situation and affect it for a long time. In addition, the escalating trade friction between China and the United States has played a negative role in demonstrating other countries and worsening China's export environment. Since 2019, Eurasian economies, Argentina, Mexico, Vietnam and other countries have launched anti-dumping investigations into China's exports of aluminum, aluminum products and aluminum-containing commodities, and imposed temporary anti-dumping duties.
The escalating U.S. trade sanctions against our country have undermined the free system of international trade. In response to the deteriorating export environment and any possible trade sanctions, China's aluminum processing enterprises should be both internal and external. To develop new applications, expand aluminum consumption, to ensure the scale of aluminum consumption, because domestic is the leading consumption of aluminum, external enhance the capacity of international trade negotiations, actively participate in international litigation, to ensure their legitimate rights and interests or to minimize the impact of trade tariffs, while for capable enterprises can consider international capacity cooperation, multi-dimensional development to avoid the impact of trade friction.
Contact Person: Mr. James Wong
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