Monday, January 11, 2016

2016 Will Be Pivotal Year for AEC’s Fair Trade Case

It is hard to believe that it was only five years ago that the U.S. aluminum extrusion industry pulled its resources, data, and resolve together to petition the U.S. Federal Government to initiate tariffs against Chinese extrusion exporters using illegal and unfair trade practices.  Those orders transformed our industry into one of the most vibrant manufacturing niches in our economy.

All across the United States extruders are boasting of new equipment, new market opportunities, and a positive outlook going into 2016.  That is not the case for other aluminum semis coming out of China.  Foil, sheet, and plate are all witnessing the invasion of cheap Chinese imports, which is not only eroding domestic production but also flooding the world with aluminum.  In hindsight it is clear that our industry was right when it determined it would either need to take trade action or watch the market go to the Chinese.

So, here we are at the five-year mark. This is the year we will be reapplying for protection.  Once again, we will all have to pull our data together for the Government.   We will be seeking an extension of the tariffs by making it clear that without trade protection our domestic industry will virtually vanish.  In the coming days, we will be sending out the template for data collection, and setting a series of conference calls in which members can ask questions or seek clarification as the process unfolds in the first quarter of 2016.  All members are welcome to submit data, and the more we get the stronger our case.

While the Expiry Review may be the biggest event for our case in 2016, it is not the only issue in play this year.  In the fall of 2015 the AEC launched a Scope Clarification/Circumvention case against China Zhongwang.  In December, the Department of Commerce (DOC) pushed their decision out until January.  So we look for a ruling from the DOC in the next few weeks.  Similarly, the DOC had postponed rulings on the 5000-series alloy scope requests until January.  Speculating that the DOC is positioning itself to rule on all of the questions being posed by these cases all at once, we look to have a resolution very soon.

And finally, just because we have our five-year anniversary review, it does not mean we skip this year’s Administrative Review.  So, there will be an Administrative Review running in parallel to the Expiry Review.  The Administrative Review will determine the tariff rates for 2016 and 2017.  As you may recall, we saw rates increase in 2015.  For the first time since the inception of our case, we actually saw tariffs increase!  Now, those that sought a special rate will get a countervailing duty (CVD) rate of 22%, and an antidumping duty (AD) rate of 86%.  This combined new rate of 108% is more than double last year’s rate of 42%.  So, we will be working hard to hold that ground in the forthcoming Administrative Review.

Maintaining our focus on this case and applying resources as needed has not only reversed any ambitions Chinese extruders had to capture our market, it has turned the tables in our favor.  Maintaining our orders with a successful Expiry Review is job one in 2016.  Along with that, we must continue to build on our wins with higher tariffs in 2016.  Lastly, we must remain vigilant when it comes to scope and circumvention issues.  Plugging holes that have developed as the exporters and importers seek ways to evade duties is key to our continued prosperity.  Without your support and involvement, none of this will happen.  So, let’s be sure to keep executing and driving our trade agenda into the New Year.

1 comment:

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