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by: Senator Charles E. Schumer- (D - NY)
Washington, D.C. - April 17, 2019 - (The Ponder News) -- Standing at the Novelis factory in Oswego, U.S. Senator Charles E. Schumer urged the United States Department of Commerce (DOC) and United States Customs and Border Protection (CBP) to expedite the review and approval of the company’s remaining product exclusion requests from aluminum tariffs that involve imports from Canada. Novelis, which is a top employer in Oswego County, employing over 1,100 people, is a major contributor to the Central New York economy and is seeking exclusions from the Section 232 tariffs that were implemented in March 2018.
Schumer said that while targeted tariffs on heavily subsidized aluminum imports from countries like China–which bends and breaks fair trade rules–can be effective, broad-based tariffs on good actors from partner countries like Canada are negatively impacting companies like Novelis that have an integrated supply chain between its North American facilities. Schumer will say that these tariffs have made Novelis’s New York operation less competitive and will demand that the federal government eliminate these poorly targeted tariffs completely. In the meantime, Schumer called on DOC and CBP to work through Novelis’s product exclusion requests ASAP, to protect Novelis and the Central New York economy from unwarranted damage.
“I have always supported using tariffs to crack down on predatory trade practices from countries like China that massively subsidize their aluminum products and hurt American workers, but targeting allies like Canada with these same tariffs is wrongheaded and does damage to the same entities they are meant to protect—including Novelis’s successful Oswego operation and their 1,100 employees. Tariffs on Canadian imports are forcing Novelis—which has a deeply integrated supply chain in North America, with a major leg of it here in Central New York—to seek product exclusions to avoid paying a hefty price,” said Senator Schumer. “That is why I’m urging the feds to negotiate a common sense deal with Canada that will scrap these unwise tariffs ASAP. In the meantime, the feds must do everything they can to provide temporary relief by expediting and approving Novelis’s remaining requests for tariff exemptions on products that are integral to its Oswego facility.”
Schumer said that Novelis’s Oswego Facility, which opened in 1963, represents its first U.S. operation and largest fabrication facility in North America. With over 1,100 employees and an economic impact of $151.96 million, the facility produces more than a billion pounds of high-quality aluminum products each year used primarily by automotive, building and beverage can markets. Notably, in 2016 Novelis invested more than $500 million to produce aluminum sheet for Ford’s F-Series, F-150 trucks and Expedition SUV. However, Schumer detailed, because the Novelis Oswego plant relies on a supply chain with a Novelis facility in Kingston, Ontario, they are paying significant duties on products due to the Section 232 aluminum tariffs that were implemented in 2018.
Schumer explained that the supply chain between Novelis’s facilities in Oswego and Kingston is closely intertwined due to the unique capabilities at each location, prior duty-free transactions and their close proximity to one another. In fact, all of the products made by Novelis in Kingston are supplied by the Oswego facility, making the Kingston facility the Oswego largest customer. Schumer argued that product exclusions from Section 232 aluminum tariffs will help Novelis avoid excess costs and a significant disruption to their supply chain. Schumer stated that if Novelis doesn’t receive exclusions on material imported from Kingston, the Oswego facility could lose a significant portion of its business and would have to find new markets for its aluminum.
“When it comes to the international aluminum market, China cheats, subsidizes its producers and floods the market, and Canada, which is our steadfast ally, does not,” said Schumer. “It makes no sense to put these two nations in the same basket and treat them with the same negative tariff weapon.”
Therefore, Schumer said that the administration must work towards a deal with Canada that will eliminate these tariffs permanently. In the meantime, Schumer urged DOC and CBP to provide temporary relief to Novelis by expediting and approving the existing product exclusion requests. In 2018, Novelis applied to exclude 897 products it imports from Canada from 232 tariffs that impact the Oswego facility. Schumer worked closely with DOC and CBP to secure expedited consideration and approval of just over 560 of those requests already. Now Schumer is demanding that the remaining 292 requests be examined and approved immediately as well. In addition, since exclusion requests only last one year, Schumer is urging DOC and CBP to also quickly expedite and approve all of Novelis’s already approved exemption requests for a second year.
On March 8, 2018, the U.S. authorized tariffs on imported steel and aluminum from Argentina, Australia, Brazil, Canada, Mexico, the European Union and South Korea from under Section 232 of the Trade Expansion Act of 1962 on the grounds of national security. Schumer noted that while he has long supported using Section 232 tariffs to stop heavily subsidized foreign companies from dumping artificially cheap metals in our markets, targeting good actors from partner countries like Canada are poorly targeted and negatively impacting companies they are meant to help like Novelis.
A copy of Schumer’s letter to DOC and CBP appears below.
Dear Secretary Ross and Commissioner McAleenan:
I write to request that the Department of Commerce (DOC) and Customs and Border Protection (CBP) expedite the review of Novelis Inc.’s remaining product exclusion requests that involve imports from Canada. Novelis submitted nearly 900 product exclusion requests from the Section 232 aluminum tariffs that were implemented in March, 2018. Each of these requests have a direct impact on its Oswego, New York facility given its integrated supply chain with a Canadian facility. While most of these requests were approved, many have been backlogged for months and the recent government shutdown only caused further delays.
Novelis’s Oswego facility represents its first U.S. operation and largest fabrication facility in North America. With over 1,100 employees, the facility produces more than a billion pounds of high-quality aluminum products each year used primarily by automotive, building and beverage can markets. Notably, between 2012 and 2016 Novelis invested more than $500 million to produce aluminum sheet for Ford’s F-Series, F-150 trucks and Expedition. However, because the Oswego plant relies on a supply chain with a Novelis’s facility in Kingston Canada, the company is paying significant tariffs as a result of the Section 232 aluminum order.
The supply chain between Novelis facilities in Oswego and Kingston are closely integrated due to the unique capabilities at each location, prior duty-free transactions and their proximity to one another. Product exclusions from Sec. 232 aluminum tariffs will help Novelis avoid a significant disruption to their supply chain. If they do not receive exclusions on imports from Kingston, production capacity at both locations could go down.
While I support targeted tariffs on heavily subsidized aluminum imports, from countries like China, broad-based tariffs on good actors from partner countries like Canada are negatively impacting companies like Novelis that have an integrated supply chains between North American facilities. In January, Congress passed into law a nearly $5 million increase in funding for the Section 232 exclusion process that should help speed up the current process. I understand that the recent government shutdown caused further delays and that pending requests that were objected to may require extra time to review and should be carefully evaluated. Again, to the extent possible, I urge the DOC to expedite Novelis’s remaining exclusion requests that involve imports from Canada and CBP to work through any administrative issues in a timely manner. In addition, I am asking that you quickly expedite and approve all of Novelis’s already approved exemption requests for a second year.
Thank you for your consideration of this important matter. Please don’t hesitate to contact me or my staff should you have further questions.
Sincerely,
