Lawmakers urge US Treasury to reject sale of aluminium giant to China
Letter to treasury secretary says selling Aleris to China Zhongwang Holdings would be a ‘strategic misstep’
More than two dozen US lawmakers have urged US Treasury Secretary Steven Mnuchin to reject the proposed sale of US aluminium products maker Aleris to China Zhongwang Holdings to protect US security interests.
In a letter to Mnuchin on Friday, the 27 lawmakers said it would be a “strategic misstep” to allow the US$2.33 billion sale to go ahead.
“It is critical that CFIUS exercise extreme caution when a foreign investment transaction includes the transfer of military proficiencies and sensitive technology to China,” the lawmakers wrote, referring the Committee on Foreign Investment in the United States. “It would be a serious strategic misstep to permit a company like Zhongwang Holdings to take control of a US aluminium firm like Aleris.”
The lawmakers said Aleris was involved in the production and testing of specialised alloys used by the defence industry, and the company’s research and technology were critical to US economic and national security interests.
“Chinese entities, including state-owned or state-controlled enterprises, often maintain relationships with China’s military, compounding the risk that US technologies will fall into the wrong hands,” they wrote.
Additionally, Zhongwang was under investigation by the US Department of Commerce for allegedly evading US import duties, and was being probed by US agencies over allegations of smuggling, conspiracy and wire fraud, they said.
Aleris spokesman Jason Saragian said Aleris did not make defence products in the United States.
“We believe this letter is based on misinformation,” he said. “The facts are that the completion of this transaction would result in job preservation and growth for hundreds of US aluminium manufacturing jobs,” he said.
Zhongwang, backed by Chinese aluminium magnate Liu Zhongtian, announced the deal in August, in a bet by the billionaire that the nascent US car aluminium sector will be the industry’s next big growth market.
Last November, a dozen US senators wrote to then treasury secretary Jack Lew urging him to launch a review of the deal by CFIUS.
Lawmakers who signed the new letter include House of Representative Democrats David Loebsack, Tim Ryan, Gene Green, Debbie Dingell, Seth Moulton, Marcy Kapur, Pete Aguilar, Tony Cardenas, Brenda Lawrence, Norma Torres, Linda Sanchez, and Republicans Robert Pittenger, Keith Rothfus, and French Hill.