Skip to main content

Fair Trade - What’s at stake?

AEC Past Chairman Duncan Crowdis
In the last two blogs, we have talked about what it takes to be successful in a fair trade case such as the one the extrusion industry brought before the U.S. government. The process is long and arduous. It takes a focused commitment from the entire industry. And it takes money. On top of that, the drive must be maintained for the long run. This is not a sprint; it is a marathon.

So, is it worth it? What’s at stake?

As we mentioned in last week’s blog, the Chinese will NOT give up. They have extremely strong strategic, economic and political reasons to vigorously continue to fight this battle. The Chinese extrusion industry has built a capacity that far exceeds their current and future domestic need and, in fact, could supply a good part of the global requirement. Their desperate need to create employment significantly outweighs any supply/demand rational for this build-up in capacity.

Once you buy the argument that the Chinese extrusion industry will do everything in their power (legal or otherwise) to penetrate markets outside China to the extent possible, with the U.S. being the largest and most attractive target, it’s simply a question of – is it worth the fight to defend our business? So let’s take a look at what is at stake.

Our industry is incredibly diverse. It is one of our greatest strengths. We have operations in more than 40 states with over 300 presses that have a combined capacity of more than 4.5 billion pounds annually.

Here are some statistics that, while not backed up by a complex industry-wide survey (only governments can afford to do this), the data has been pulled together by a number of us that have been in the industry a long time and undoubtedly represent several hundred years of experience.

How many people do we impact?
  • In total our industry directly employs more than 20,000 Americans
  • When taking into consideration the supplier base, this number likely doubles to more than 40,000 employees
  • These 40,000 employees support over 100,000 children, spouses and aging parents.
The bottom line: there are more than 150,000 real people in the United States that count on our industry to feed them, clothe them, send them to school and support them in many, many other ways. They are counting on us; counting on you! Is that not enough reason to fight for what is right?

If not, let’s look at a high-level view of the financial side of our industry:
  • The domestic industry in the U.S. is currently operating at about 3.5 billion pounds per year with an estimated total  annual revenue of close to $8 billion
  • In 2009/2010, prior to the Department of Commerce applying the preliminary duties, imports from China reached a running rate of close to 20% of the total U.S. market, which would translate into an annualized reduction in domestic production of about 700,000 lb. today.
    • This level of production represents approximately 45 full presses and revenues of about $1.5 billion
  • And, unless a supplier to this industry has a business model that can easily shift their marketing efforts and production to China, the impact would be just as dramatic. Consider these products that are purchased by our industry:
    • Billet – Billet producers would see a reduction in domestic billet demand of about 900,000 lb. or $1 billion in revenue
    • Paint – assuming 15% of the domestic extrusion production is painted, paint suppliers would experience a reduction in revenue of over $25 million
    • Anodizing Chemicals – based on similar assumptions, this industry could anticipate a reduction in revenue of about $25 million
    • Dies –  Die makers would see a reduction of about 40,000 dies per year or about $40 million of revenue
    • And then there are all of the other supplies (packaging, maintenance, etc.)
And all of this assumes that the Chinese were not interested in any more than a 20% market share. This has not been the experience in other markets they have targeted (a subject of a future blog) and it would be a dangerous assumption for us in the U.S. to make.

While I would argue that these numbers are extremely conservative and that, in fact, our industry as we know it is completely at risk without concerted and industry-wide intervention, if anyone believes that these numbers seem exaggerated, divide them in half. The logic to fight is, quite frankly, no less compelling.

So, whether a player in our industry is driven by a sense of responsibility to 40,000 employees and their families or simply driven by a desire to have a financially strong and sustainable business, THE STAKES ARE EXTREMELY HIGH  and worth the fight.      

If you feel as passionate as we do and want to do something more than be an “interested by-stander”, contact the AEC to find out how you can help to control YOUR future.

Visit for more information.

This post was written by AEC Past Chairman Duncan Crowdis


Popular posts from this blog

Fair Trade Update: Curtain Wall, Door Thresholds & Vietnam

Well, our year is off and running with a bang. Scope issues, Administrative Review, and circumvention top our list in early 2018.

This month we learned that there will be an appeal in the curtain wall scope case.  Permasteelisa and Jangho filed a notice of appeal last week.  It is expected that Yuanda will almost surely file their own notice of appeal by the deadline, which is February 12. The Chinese industry signaled that they would appeal in a recent article in US Glass magazine.   

Additionally, our scope challenge related to door thresholds continues to move forward.  This is a significant case because door thresholds are expressly mentioned as subject merchandise in our trade orders.  So, to lose this application could open the door to many applications clearly covered by our case.  Finally, we continue to await the judges’ (there are more than one judge at the CIT) decision in the appliance handles cases we defended last fall.  We believe we will win.  However, we are mostly i…

WOW! Did he say ‘Billion’?

The biggest news to hit the trade case came last month.  The Department of Justice (DOJ) filed a complaint against Perfectus seeking $1.5 Billion in unpaid duties for the fake pallets exported to the United States.  The DOJ didn’t pull any punches in their submission.  From the complaint, the DOJ stated, “Zhongtian Liu, a Chinese national, is the founder and chairman of China Zhongwang, one of the world’s largest industrial aluminum extrusion companies. Zhongtian Liu controls and is effectively the owner of Perfectus Aluminum, Inc. (“Perfectus”).  Between 2011 and at least 2014, Zhongtian Liu used Perfectus to illegally import more than 2.1 million aluminum “pallets” from China into the United States, as described in detail below.2 The “pallets” were manufactured by China Zhongwang and/or its affiliates and “sold” to Perfectus by several intermediary entities, including Dalian Liwang Trade Co., Ltd., Zhongwang Investment Group, and Yingkou Quianxiang Trading. Many of these intermediar…

Heating Up & Settling Down: The Dichotomy of our Trade Case

The agenda for our trade case continues to be driven by transshipment/circumvention issues and the 232 Investigation.  Meanwhile, our ‘base case’ is so quiet that we’ve been able to free up budget dollars from the Administrative Review to finance our circumvention case against Vietnam.

The Administrative Review is now complete.  The final rates determined by the Department of Commerce are 86% for countervailing duty (CVD) and 16% for anti-dumping duty (AD).  The total of 102% is our highest rate since we first filed the case.

Scope issues have calmed down a lot.  In fact, only the curtain wall case, the appliance handles case, and door threshold cases are on the front burner.  Reports from the hearing for the curtain wall case were very positive.  The attorney leading that effort, David Spooner, is quite confident we will win this round.  Of course, we fully expect another appeal from the Chinese.  We are awaiting the decision from the judge in the appliance handle cases and believe w…