Monday, October 10, 2016

Making Our Case Known

In case you missed it, the Wall Street Journal wrote back-to-back articles about Zhongwang and Aluminum Shapes.  In a scathing indictments the Journal linked Zhongwang to the massive inventory of aluminum extrusions in Mexico and connected Aluminum Shapes to Zhongwang about the so-called aluminum pallets.  Consequently, both Zhongwang and Aluminum Shapes came out with their denials.  Regardless, the issue certainly has grabbed the attention of the Department of Commerce (DOC) and Customs.

For the AEC the timing was perfect.  With our fall conference located in Washington DC, we were able to take our case to Capitol Hill asking for support in pressing Commerce on a decision about the pallets.  We expect the DOC to rule in our favor on the pallet issue by declaring them within the scope of our orders and therefore subject to tariffs and fines.  If the DOC should decide not to call the pallets in scope, then our petition calls on them to immediately launch a circumvention investigation.  Either way, we are in a strong position to bring this issue to justice.

For those awaiting a decision from Commerce on the 5000-series alloy issue, we continue to press the DOC to send additional questionnaires to all known importers and exporters of these extrusions, which are clearly a circumvention scheme.  I should also comment that I am hearing rumors that the next substitution the Chinese will try to exploit is 7000-series alloyed extrusions.  I am asking AEC members to send me any details and news they are seeing in the field related to this issue.

During the AEC Management Conference, Robert DeFrancesco, our lead attorney from Wiley Rein, outlined the next steps in our Sunset Review.  The International Trade Commission will be issuing new questionnaires for our industry participants.  We expect to see those forms very soon, and anticipate them to be due back to the International Trade Commission (ITC) before the end of 2016.  Stay tuned for more information on this.  While we don’t expect any opposition to our base extrusion case, the ITC will hear ‘like product’ arguments from companies buying and selling heat sinks, appliance handles, and heat exchanger units.  The petitioners in the ITC hearing will be arguing that their product is distinct and different from extrusions.  While these are similar arguments we’ve seen in scope challenges at the DOC, they are different.  We will certainly be arguing that these products have generally been considered in the scope of our orders, and allowing them into our market will cause harm to our industry.

Recently, the AEC went on the record in opposition to the proposed purchase of Aleris by Zhongwang.  We’ve added our voice to others, including the United Steel Workers, in an effort to educate law makers about the potential harms to our industry and the overall aluminum industry.
Clearly, the AEC has been busy getting its voice heard all over the world!  The number of news outlets that covered the Wall Street Journal article is in the hundreds.  In fact, the news that the Mexican metal horad could account for 6% of all the aluminum in the world went viral.  It is great to see the coverage on these issues and for the AEC generally.  As you now know, we will not back down.  Instead we aim to keep the pressure on as we await the World Trade Organization’s (WTO’s) decision on China’s request for market economy status.  With all of the recent revelations about the largest extruder in China, we believe we are doing more than our fair share of bringing these issues to light.