Import Monitoring Systems: Steel and Aluminum
March 29, 2023
Import Monitoring Systems: Steel and Aluminum
Background
statistics from the U.S. Census Bureau. On balance, the
Over the years, several domestic manufacturing industries
SIMA system comprises the import licensing system and
have sought insulation from import competition—two of
the public monitor.
particular note include steel and aluminum. Both industries
have formally established import monitoring systems—
In October 2020, the SIMA system underwent an extensive
regulatory programs administered by a federal agency that
modernization, in which the licensing system and public
monitor for certain imported goods. In the case of the steel
monitor were updated. The update occurred as a result of
and aluminum import monitoring systems, both operate
joint understandings announced in May 2019 between the
under the authority of select provisions of the Census Act of
United States, Canada, and Mexico with respect to tariffs
1930, as amended (13 U.S.C. §§301(a) and 302). These
imposed on certain steel and aluminum imports under
systems monitor for imports of certain steel and aluminum
Section 232 of the Trade Expansion Act of 1962 (19 U.S.C.
products to help anticipate import surges and changes in
§1862). Since May 2019, Canada and Mexico have been
price, as well as any potential impact on the domestic
exempt from such tariffs; several other countries face
industries.
modified restrictions, such as tariff-rate quotas in lieu of
tariffs.
The steel import monitoring system has been in effect for
over two decades, while the aluminum equivalent was
One update of the SIMA system pertained to the license
brought online in mid-2021. The Department of Commerce,
application, which now requires applicants disclose
International Trade Administration (ITA), manages both
additional supply chain information, specifically the
systems. Both of these import monitoring systems have the
country where the steel used in the manufacture of the
potential to serve as a supplementary tool to existing trade
imported steel product was melted and poured (commonly
measures intended to help domestic producers remain
referred to as the country of melt and pour). According to
competitive relative to foreign producers.
ITA, melt and pour refers to the original location where the
crude steel was produced in a furnace in its liquid state and
Steel Import Monitoring System
then processed into its first solid shape, being a
The steel import monitoring system was first established
semifinished product (e.g., billets, blooms, or slabs) or a
concurrently with the implementation of safeguard
finished mill product. For example, if the United States
actions—import measures designed to provide temporary
imports certain steel products from a Mexican mill, the
relief for a U.S. industry through the use of tariffs and/or
country of origin may be Mexico, where the product was
quotas—on certain steel products under select provisions of
manufactured; however, where the products were melted
the Trade Act of 1974 (19 U.S.C. §§2251-2253). These
and poured could include other countries, such as Brazil or
temporary safeguard measures went into effect in March
Russia, among others. SIMA’s melt and pour dashboard
2002, and the steel import monitoring system was activated
provides data breakouts by country of origin, as well as
in February 2003. The Steel Import Monitoring and
country of melt and pour, expressed in quantity and value.
Analysis (SIMA) system—the formal name of the
This information provides increased visibility on where
program—became codified under ITA in March 2005 and
steel products are primarily sourced.
has been in effect since.
Information that importers or customs brokers must provide
The intent of the SIMA system is to monitor for import
in the import license includes the country of exportation,
surges through the implementation of an electronic-based
expected date of export, expected date of import, expected
import licensing system. Such a system could provide an
port of entry, and the date of application, among others.
early warning for import surges and price fluctuations of
U.S. importers have up to 60 days prior to the expected date
certain steel products entering the United States. U.S.
of entry to file an application, with the license being valid
Customs and Border Protection requires an ITA-issued
for 75 days. ITA recommends importers apply for licenses
import license for imports of certain steel products prior to
as far ahead of entry as possible to avoid delays. Doing so
their entry into the U.S. customs territory. In addition to the
could provide increased visibility from a regulatory
licensing system, ITA maintains a web-based monitoring
perspective to monitor for import surges.
tool that provides information on the trade of downstream
steel products and trends of U.S. and global steel trade.
Aluminum Import Monitoring System
Data obtained from the import licenses are aggregated and
The Aluminum Import Monitoring and Analysis (AIM)
incorporated into a website—the public SIMA monitor—
system has been in effect since June 2021 and is modeled
where the public can view and visualize data on a weekly
after the SIMA system. Like its steel equivalent, the AIM
basis. Such information can provide up to eight weeks of
system uses electronic-based licensing for certain imported
import data in advance of the release of official import
aluminum products and contributes to a website that details
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Import Monitoring Systems: Steel and Aluminum
trends in U.S. and global aluminum trade—the public AIM
According to estimates from the U.S. Geological Survey
monitor.
(USGS), imports accounted for 14% of U.S. steel
consumption in 2022, compared with 13% in 2021.
Like SIMA, the AIM licensing system requires that U.S.
importers disclose unique supply chain information
Figure 1. Top Five Import Sources of Steel, 2022
concerning imported aluminum products. Specifically,
importers and customs brokers must identify the largest and
second-largest country, in terms of volume, of primary
aluminum used in the manufacture of the imported
aluminum product. The applicant must also identify the
country where the imported aluminum product was most
recently cast (these two requirements are commonly
referred to the country of smelt and cast). The AIM has two
individual dashboards that detail the country of origin,
smelt, and cast for imports of aluminum products.
According to the ITA, the AIM system, like SIMA, serves
as an additional tool to identify potential transshipment and
Source: U.S. Department of Commerce, “U.S. Steel Import
circumvention of existing antidumping and countervailing
Monitor,” accessed March 9, 2023.
duty orders. At present, the ITA estimates that the AIM
licensing system receives approximately 750 licenses per
Aluminum
day, while SIMA’s licensing system receives roughly
The U.S. and Canadian aluminum industries are heavily
double this amount. ITA expects to spend roughly $800,000
interconnected, as each market is a major trading partner of
to operate the AIM system in FY2023.
the other across the aluminum value chain. Of the 6.4
million metric tons of aluminum imported into the United
Trade and Sectoral Integration
States in 2022, almost half came from Canada (Figure 2).
In addition to the steel and aluminum import monitoring
Canadian output of primary aluminum reached an estimated
systems, other regulatory tools are in place to support these
3.03 million metric tons in 2022, more than three times that
industries. The United States maintains restrictions on
of the United States, with the vast majority of that
imports of steel and aluminum in order to shield domestic
production exported to the United States. The same year,
producers from foreign competition by limiting the volume
the United States exported 736,000 metric tons of
of imports into the U.S. market. Import protection has been
semifinished aluminum products (e.g., plates, sheets, bars),
in effect, in various forms, since the late 1970s for steel and
with Canada and Mexico accounting for 43% and 39% of
the early 2010s for aluminum. Despite these measures, a
such exports, respectively.
relatively large portion of the U.S. market is satisfied by
imports for both of these industries.
Imports supplied 54% of the U.S. aluminum market in
2022, up from 41% in 2021, according to USGS estimates.
For both the steel and aluminum industries, U.S. imports
An important reason for the imbalance between production
exceed exports; however, this can be misleading as the
and consumption is that the United States is a major
North American market is highly integrated, particularly
exporter of aluminum scrap, which represented 66% of total
between Canada and the United States. Across both
export volume in 2022. By contrast, imports of aluminum
industries, Canada is the largest source of U.S. imports
scrap represented 11% of total aluminum imports. Imports
annually. Mexico has recently become the second-largest
of aluminum scrap are not subject to the AIM’s license
source of steel imports. Mexico is not a major producer of
requirement.
aluminum; however, Mexico consumes large volumes of
North American aluminum, predominantly supplied from
Figure 2. Top Five Import Sources of Aluminum, 2022
the United States. In terms of U.S. exports, Canada and
Mexico are the two largest recipient markets for both steel
and aluminum products.
Steel
In 2022, U.S. domestic steel production totaled an
estimated 82 million metric tons; 10% of output was
exported, with more than 90% shipped to Canada and
Mexico. U.S. imports summed to 28 million metric tons,
39% of such imports supplied from Canada and Mexico
(Figure 1). The U.S.-Mexico-Canada Agreement affords
duty-free movement of steel mill products among the three
countries—an additional indicator of the high integration of
Source: U.S. Department of Commerce, “U.S. Aluminum Import
the North American market. Other moderately large import
Monitor,” accessed March 9, 2023.
sources include South Korea (9%), Brazil (8%), and Japan
Christopher D. Watson, Analyst in Industrial
(4%). U.S. tariffs and/or quotas limit imports from all of
these countries, as well as from numerous others.
Organization and Business
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Import Monitoring Systems: Steel and Aluminum
IF12363
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https://crsreports.congress.gov | IF12363 · VERSION 1 · NEW