2014 Outlook – Extrusion Industry Sees Eventful Year in US/China Trade Case

Jeff Henderson,
AEC Director of Operations

In our essentiALs January 22nd email, AEC members were updated about the recent events in the China import case. Now, I’d like to outline the key issues for 2014. There are three significant areas the industry will focus on this year. The first is administrative reviews, the second is scope requests, and the third is the continued lobbying efforts on Capitol Hill.

The first annual Administrative Review came to an end in late 2013, and the second review is now well underway. As you may recall, there were over 60 Chinese extruders and U.S. importers that sought separate countervailing (CVD) and anti-dumping (AD) rates from the combined People’s Republic of China (PRC)-wide entity rate of over 160 percent. The Department of Commerce (DOC) selected three companies to review as being representative for all requests. In these reviews, the respondents attempt to lower their dumping and subsidy margins by demonstrating that they are not part of the PRC-wide entity and have not received countervailable subsidies. Going into the first administrative reviews, the prevailing rates were between 8 and 127 percent in the CVD review and between 32 and 33 percent for AD. At the conclusion of the first administrative reviews, the Department determined that the mandatory respondents (i.e., the two companies directly examined) received between 1.5- and 15.6-percent CVD margins and the 59 non-reviewed respondents received an average CVD margin of over 10 percent. The PRC-wide CVD rate remained 127 percent. In the AD review, the Department determined that except for one mandatory respondent, the other 9 respondent companies considered in the review had AD margins of over 32 percent. The PRC-wide AD rate remained 33 percent.

In the second administrative review, there are approximately 141 respondent companies seeking to reduce their dumping margins and approximately 70 companies seeking to reduce their subsidy margins. Of these companies, the Department once again selected two companies (Kromet International Inc. and Jiangsu Changfa) for individual examination in the CVD review and two companies (Guangzhou Jangho Curtain Wall System Engineering Co. Ltd. and Zhongya/Guang Ya Group/Xingya) for individual examination in the AD review. The Department will issue its preliminary AD and CVD determinations by June 18th.

There are 25 scope decisions awaiting decisions. Now that the first administrative review is complete, we expect to see a series of decisions from the DOC in the coming weeks and months. The first decision of note will concern unitized curtain wall. The AEC also continues to actively examine all avenues of possible circumvention of the orders. As the AEC develops credible evidence of circumvention, it will actively and aggressively pursue all possible violators.

The third area of our 2014 agenda is the extension of the industry’s lobbying efforts in Washington. As previously reported in essentiALs, several AEC members made a trip to DC late last summer encouraging the DOC and several members of Congress to remain strong in their interpretation and application of the original orders that only kitted products that are packed, shipped, and complete as finished products are to be excluded. Many extruders became concerned that the ‘bright blue line’ drawn between kitted subassemblies and kitted finished products in the original orders has been eroded in decisions in the second half of 2013. With by-partisan support of 17 House members and 13 Senators a letter to the Department was sponsored and signed expressing the concerns of the Congressman and Senators over the Department’s recent narrowing of its interpretation of the scope of the orders and encouraged the Department to maintain the original ‘bright blue line’. A follow up meeting with the DOC will occur very soon by AEC staff and members so we can make our case directly. We will also offer helpful input to Commerce on ways they can view incoming product requests in a fair and expeditious manner. However, we won’t stop there. The contacts and lines of communication that we’re establishing in Washington will continue to be developed in 2014. The AEC will continue to make our voice heard in DC.

This year certainly will be busy and extruders’ confidence should remain high! We will continue to be successful in defending the orders we fought so hard to win. Volunteer efforts by the industry representatives, new staffing at the AEC, and our solid funding base will work together to keep our industry protected from these illegal and unfair trade practices. In my next blog entry I’ll discuss the funding plans for 2014. The extrusion industry should be proud of the way it’s come together in this important area, and with its continued support, we will remain successful.