Tuesday, November 8, 2016

The Defense of our Orders

For months now I’ve reported that the center of the universe for our Chinese aluminum extrusion tariff orders has moved from being petitioners, to fighting through an unprecedented number of scope issues, to now, defending our orders.  To that end we have a number of issues still on the table and still unresolved.  We are now well over a year since we petitioned the Department of Commerce (DOC) to do something about the fake pallets and 5000-series alloy issue.  During that time we have visited with the DOC, sought and received help and political pressure on the DOC from many of our senators, and even put pressure on them through the media.  Finally, late last week we received the preliminary decision from the DOC on the 5050 alloy issue.  Now we wait for the pallet decision.

For some time now we have been taught by the DOC’s lack of responsiveness that the only way to get some movement is to harass our elected officials into berating the DOC.  With the election just days away, at the time this entry was penned, it appears bureaucrats are preparing for their next job instead of focusing on today’s work.  Will we get a different DOC with the change in administrations?  Who knows?  So, in the meantime, we will keep the pressure on them, and if necessary we will make another visit to D.C.!

Recently, the media, and especially the Wall Street Journal, have written a series of articles about ZhongWang and their business affiliates.  This in turn has taken our story to the front pages. This will help us keep our issues alive in D.C. during what could be an uncertain transition in a lame duck session.

I thought I would use this month’s report to update everyone on a few questions I’ve been asked.

  1. Has the AEC taken a position on ZhongWang’s purchase of Aleris? The answer is, ‘yes’. The AEC has filed a brief in opposition to this purchase.
  2. What are the current duty rates?  The answer is 106%.  Now that may vary depending on the company.  However, for a straight up importer of extrusions they will most likely pay 106%.  That breaks down into 80% antidumping duty and 26% countervailing duty.  We will get a final decision from the DOC this December on whether or not they will stay with that rate.
  3. What are our chances of winning the Sunset Review?  Since no one is opposing our base orders, it appears the orders will be renewed.  However, we will have to make the case for this, even though there may be no opposition.  We will have ‘like product’ challenges that include appliance handles, heat sinks, and heat exchangers.  This means that representatives of these products will try to convince the International Trade Commission that their products are so different from extrusions that they must be excluded.  On these issues we feel confident we will have a winning case.
  4. What is the AEC doing to help preserve a domestic aluminum supply?  This is a tough one.  Right now, Century Aluminum is leading the charge to do just this.  They have developed a strong case that they are attempting to persuade the United States Trade Representative’s office to take to the World Trade Organization.  We have supported this effort in every way possible.  The AEC believes that the Century case will not only force the Chinese to stop the over-production of aluminum, but expose the systemic issues within Chinese policies that drive this type of behavior.  Furthermore, we have supported the efforts of the Manufacturers for Trade Enforcement.  This group is working hard on a diplomatic solution.  Our view here is that in the end, the solution will be found through negotiations, but it may take a trade case at the WTO to make that happen.
  5. Is it true that you are being sued by Aluminum Shapes?  Yes, it is true.  I have been sued personally by Aluminum Shapes.  As you can appreciate, I won’t comment publicly about the case.  However, I want the members to know that I am innocent and well prepared to defend myself.  This in no way will impact my resolve or determination to make our marketplace a free and fair trade environment.  

So, here we are, fighting for the survival of our industry while our Industry Promotion teams work hard to create a larger demand for our products and our Business Excellence teams are making us better extruders.  That is our strategy in motion.  It is a fight, but as they say, “It’s not the size of the dog in the fight; it’s the size of the fight in the dog that matters.”  The AEC has shown the world that this dog has a lot of fight; we know it, and we, will win as a result of it.