Wednesday, July 30, 2014

The Aluminum Extruders Council Supports Chinese Imports

I bet you never thought you’d hear me say that, right?

The Fair Trade Committee has worked hard over the last five years to create a fair and level playing field for aluminum extrusion shipments from China.  Over the last couple of years we have seen a combined duty of approximately 42%.  Even though we can’t say with certainty the rate will not change, it seems as though we have hit a plateau.  One interpretation of this is that the U.S. government has looked at our case – now for the fourth time – and concluded that the tariff needed to level the playing field on a fair basis is 42%.  It is on this basis that the AEC can now say it supports Chinese extrusions.  Our ambition from the beginning was to find the right duty that accounts for the unfair and illegal trade practices of Chinese extruders that mercilessly dumped their products into our market during the Great Recession.

Furthermore, it should be noted that if a Chinese exporter or an American importer of aluminum extrusions believes that they do not have an unfair or illegal trade advantage, they can seek a special rate.  First, they could participate in the annual review process and petition the Department of Commerce (DOC) for a special rate.  In each of the first three administrative reviews there have been more than 50 petitioners seeking a special rate on the countervailing duty side, and another 50 or more petitions on the antidumping side. Compare that to the fact the NO Chinese exporters of extrusions came forward in the original investigation.   Secondly, if they believe the products being exported to the U.S. are out of scope and should not be subject to duties, they can file a scope request.  Since the final verdict was reached in late April 2011, there have been over 80 scope requests made to the Department of Commerce.  Many of these have successfully received the exclusion they sought.  In some cases, the AEC did not even oppose the petition. The bottom-line is that a path exists for those that believe they should not be subject to 42% duties to make their case, and if they are correct, they will receive a special rate, or exclusion.

So, this begs the question why a Chinese extruder that wants to compete in the U.S. market would not make every effort to do so.  From the first quarter of 2009 through the third quarter of 2010 Chinese imports into the U.S. went from approximately 7% of the market to 25%.  With such a strong position in the U.S. market, wouldn't a Chinese exporter pursue every legal option available to compete in the U.S. market?

Why wouldn't a company that’s been given the opportunity to show their books to the DOC prove existing duties is unfair?  Just this year two mandatory respondents in the anti-dumping administrative review dropped out of the process.  In 2010 the largest exporter of Chinese aluminum extrusions into the U.S. was chosen to be a mandatory respondent and declined to participate.  Isn't it odd that companies with such a significant stake in this market have done NOTHING to protect it?

Or have they?

It should be clear to the industry that the AEC will muster whatever resources are required to maintain a free and fair trade zone in the U.S. for its products.  The DOC has established the duties needed to create a fair trade environment.  U.S. and International trade law allow for companies to appeal their rate.  Any company or institution that believes they can circumvent the system, no matter how complex the scheme may be, will learn that it simply won’t work.  Illegal and unfair trade practices will not be tolerated in this market.  Those that believe they are clever enough or powerful enough, to outfox the system will eventually learn how wrong they were.

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