The Flexible Packaging Association (FPA) has been fighting against anti-dumping and countervailing duties on Chinese aluminum foil through a petition at the International Trade Commission (ITC) to no avail. We have also been working on mitigating worldwide aluminum tariffs that were slated under a Section 232 investigation by the Trump Administration with some limited success. However, recently, the Administration also announced potential tariffs on a wide range of products from China, under a Section 301 investigation, totaling upwards of $60 billion worth of goods, which may affect flexible packaging manufacturers, even if they are not in the foil converting business. China has already threatened to retaliate because of the Section 232 tariffs, and has promised further retaliation if the Section 301 sanctions are imposed on their imports, which will then affect a wide range of U.S. exports.

The ITC investigation of Chinese aluminum foil imports is based on a petition from The Aluminum Association, claiming that dumped and subsidized aluminum foil from China is causing or threatening injury to the domestic aluminum foil industry. This investigation already resulted in steep anti-dumping (AD) and countervailing duties (CVD) on aluminum foil from China ranging from 48% to 105% (AD) and 17% to 80% (CVD), which are combined on purchases. While FPA’s Aluminum Foil Converting Committee fought these duties, on March 15, 2018, the ITC ruled in favor of the petitioners by a 4-0 vote. Thus, the Aluminum Foil Converting Committee is weighing whether or not to appeal the ruling, as the deadline for filing is May 19, 2018. While the likelihood of success given the current climate and 4-0 ruling may be low — an appeal can sometimes take up to two years, so the climate will most likely be different, and the courts may look more favorably on the appellants given the completely lopsided ITC ruling.

Paralleling the ITC case is the Section 232 investigation, which was self-initiated by the Administration under the Trade Expansion Act of 1962, which seeks to determine what, if any, effects imports have on national security. The Administration targeted aluminum and steel for investigation, and based on recommendations in a report authored by the Department of Commerce (DOC) released in January 2018, the President instituted a worldwide tariff of 10% on all aluminum imports and a 25% tariff on steel. This tariff would be placed on top of the ADs and CVDs already being paid on aluminum foil from China. FPA lobbied for and was granted an exclusion process for goods “not manufactured in the U.S. in sufficient quantities or quality,” and FPA then assisted member companies with filing petitions, using a great deal of the information gathered from the ITC case. It is estimated that over 4,000 petitions have been filed, and while these are supposed to be public information, The DOC has yet to post more than 100 petitions on its website. The timeframe for the DOC to make decisions on the exclusion process was roughly 90 days, however, it is hard to imagine the DOC has the resources to respond to the overwhelming amount of petitions it has received, and to date, no petitioner has received a response.

The President exempted a host of countries from the Section 232 tariff until May 1, 2018, using the potential tariffs as a trade negotiation tactic, and on April 30, 2018, extended those exemptions to Australia, Brazil, and Argentina indefinitely; and Canada, Mexico, and the European Union (EU) until June 1, 2018. It is still uncertain if our closest trading partners will be affected or not in the near future. The EU promised retaliatory tariffs if the U.S. does not exempt them permanently, and China already released a list of retaliatory tariffs that include a wide variety of U.S. fruits, wine, ethanol, steel and aluminum articles, and pork. China also promised to fight the tariffs at the World Trade Organization.

China, one of the Unites States’ largest trading partners, is also being targeted with additional tariffs under Section 301 of the Trade Act of 1974. In August 2017, the Administration launched another self-initiated investigation into Chinese acts, policies, and practices related to technology transfer, intellectual property, and innovation. The U.S. Trade Representative (USTR) led the investigation under Section 301, which gives the USTR broad authority, subject to Presidential direction, to eliminate unfair trade practices or policies that burden U.S. commerce. This investigation resulted in a list of products that would be subject to a 25% tariff if imported from China. The products range from chemicals, chemical compounds, drugs, vaccines and medical supplies to rubber, iron, aluminum, stainless steel and other alloys, to a host of machinery, machinery parts, motors and tools, to rail cars and aircraft parts, to TVs, VCRs, monitors, circuit boards, and cameras. Public comments on the list are due May 11, 2018, and a public hearing will be held on May 15, 2018. It is expected that the tariffs will go into effect the beginning of June 2018.

FPA supports efforts to protect domestic manufacturing and ensure national security. However, any such efforts must consider the impact and consequences on all U.S. manufacturing industries. Accordingly, the scope of any remedies must be limited to address the specific objectives. The negative impact on American jobs of cutting off the supply of aluminum foil from non-domestic sources for flexible packaging manufacturing will far outweigh any job benefits that are envisioned for the U.S. aluminum foil producers. In fact, a recent report by the Trade Partnership Worldwide, LLC/The Trade Partnership, estimates the job loss for downstream users of aluminum under the Section 232 tariffs would be 18 for every one job created in that sector. Any import restrictions on aluminum foil will have a significant negative impact on the flexible packaging industry and its employment in the U.S. Restrictions and additional costs will impede packaging innovation and U.S. flexible packaging manufacturers’ ability to compete with foreign companies that do not have similar restraints.

FPA shares the same goal as the Administration in creating more domestic jobs. The Administration should find ways to work together to improve our country’s competitiveness — the duties and tariffs imposed and threatened under the current Administration will not do so. Everybody loses in unfair trade cases, especially the American worker and consumer. FPA believes the consequences of adding tariffs on imports and the resulting retaliatory tariffs that will be assessed on our exports will be more damaging to the U.S. manufacturing industry and the economy than any of the benefits sought.

For More Information

For any questions or more information on the ITC, Section 232, and Section 301 investigations, please contact Alison Keane, FPA President and CEO, at 410-694-0800 or