By David Lawder
WASHINGTON (Reuters) - The U.S. Commerce Department launched an investigation on Wednesday to determine whether a flood of aluminum imports from China and elsewhere was compromising U.S. national security, a step that could lead to broad import restrictions on the metal.
Commerce Secretary Wilbur Ross said the investigation was similar to one announced last week for steel imports into the United States, invoking Section 232 of a national security law passed in 1962 at the height of the Cold War.
Ross told reporters the probe was prompted by the extreme competitive pressures that unfairly traded imports were putting on the U.S. aluminum industry, causing several domestic smelters to close or halt production in recent years.
The move is the latest of several potential U.S. actions aimed at stemming a rising tide of aluminum imports. The Commerce Department is investigating allegations that Chinese companies are dumping aluminum foil into the U.S. market below cost and benefiting from unfair subsidies.
Ross said part of the justification for the investigation was that U.S. combat aircraft such as the Lockheed Martin (NYSE:LMT) F-35 joint strike fighter and the Boeing (NYSE:BA) F/A-18 Super Hornet require high-purity aluminum that is now produced by only one smelter, Century Aluminum Co.
He said that company could probably meet U.S. peacetime needs, but not if the United States needed to ramp up defense production for a conflict. The same high-purity aluminum goes into armor plating for military vehicles and naval vessels, he said.
"At the very same time that our military is needing more and more of the very high-quality aluminum, we're producing less and less of everything, and only have the one producer of aerospace- quality aluminum," Ross told a White House briefing.
The investigation will determine if there is sufficient domestic aluminum capacity to meet U.S. defense needs and will also assess the effects of lost jobs, skills and investments on national security, Ross said.
Although he said China was a major contributor to the global excess capacity in aluminum production, he said imports from other countries, including Russia, were also causing problems.
"This is not a China-phobic program, this has to do with a global problem," Ross said.
Last November, a dozen U.S. senators urged a U.S. national security review of Chinese aluminum Zhongwang International Group Ltd's proposed $2.3 billion purchase of Cleveland-based aluminum products maker Aleris Corp.
The transaction is still pending, and a spokesman for Aleris could not be immediately reached for comment on the Commerce Department probe.