Monday, July 13, 2015

Circumvention Issues Continue to Heat Up, Fourth Administrative Review Under Way

For this month’s update we’ll discuss administrative reviews, update scope requests, and developments in circumvention cases.  Each one has several moving pieces, so I’ll only address the key highlights.  However, this month we have the added story of how the AEC’s lobbying efforts help form U.S. trade policy in landmark legislation that recently became law. AECmembers: read the July issue of the AEC member newsletter, essentiALs, for more information.

The fourth administrative review has just begun.  Every year at this time, the Department of Commerce (DOC) reviews import data to select top aluminum extrusions exporters from the People’s Republic of China.  From this list, they will pick two or three companies for the Anti-Dumping (AD) case, and a similar number for the Countervailing Duty (CVD) case.  Chinese extruders are also offered a chance to seek a special rate by agreeing to disclose all of their production and/or sales data.  We will know which companies the DOC selects in the next few weeks.

The third administrative review is entering its final phase.  As reported last month, the DOC issued an incomplete preliminary ruling on the CVD case, and made an obvious error in its calculation in the AD case.  We expect to see a post-preliminary announcement from Commerce in mid-to-late August.  There is a growing optimism that the DOC will actually increase the rates.

Based on incoming evidence that we believe will be quite helpful in our 5xxx series alloy case, we have requested an extension to prepare our arguments.  That extension was granted.  I will update our progress next month.  Elsewhere on the scope request front, there were no new scope determinations announced by Commerce, and only two new requests.  Liberty Hardware Manufacturing Company asked for an exclusion on their shower door kits.  We will enter an appearance and ask for more information before going farther.  There was also a request from Ace Hardware regarding an extension pole product.  Products similar to this have already been excluded.  In cases with a strong precedent we generally do not respond.  We prefer to preserve our resources for more productive pursuits.

Circumvention issues continue to heat up.  I’ve received two more reports in the last month.  Both of them came from U.S. extrusion customers.  These are buyers of domestic aluminum extrusions that are abiding by the orders, but have competitors still importing product from China.  One of them filed an e-Allegation through the U.S. Customs’ website four years ago, yet has not heard a word from the government since.  It is frustrating for companies to go through this process. I’m learning that our current system is built so reporters of violations are required to use this system, but don’t get any feedback.  The pending Customs Re-Authorization Bill working its way through Congress now aims to address that issue.  I will address that in my special legislative report.

In summary, we’ve been encouraged that this year’s administrative review may be developing in a way that could lead higher tariffs for our orders.  That will be a first, if it happens.  While we anxiously want a ruling on the 5xxx series issue, new evidence will bolster our case thus causing us to seek an extension.  And, finally, circumvention reports and issues continue to be the hot topic.  We have a lot of resource aimed at these efforts that we expect will bring a result like we saw in Puerto Rico and Florida in recent months.

As always, I am grateful for your continued support!  Please direct comments to me directly at jhenderson@tso.net.