On April 26, 2017, the Secretary of Commerce (“Secretary”) initiated an investigation to determine the effects of aluminum imports on national security under Section 232 of the Trade Expansion Act of 1962 (“Section 232”). On April 27, President Trump signed a memorandum directing Secretary Ross to proceed expeditiously in conducting this investigation. The President further directed that if the Secretary finds that aluminum is being imported into the United States in such quantities or under such circumstances to threaten U.S. national security, he must recommend actions and steps to “adjust” aluminum imports accordingly. This has become the central point of discussion throughout the industry. You can read more about it in my comments on the 232 Investigation this month in the June issue AEC's member newsletter essentiALs (you will need to log in as a member to view it). For now, let’s discuss our case and its latest developments.
With the Sunset Review clearly in our rear-view mirror, we turn our attention to three main issues that are still unresolved. First, we await word from the Department of Commerce (DOC) concerning our circumvention case against Zhongwang and other exporters of these so-called 5050 alloy aluminum extrusions. Earlier this year, in its preliminary ruling, the DOC ruled that 5050 extrusions were covered by our orders and declared the import of such products a circumvention scheme. Since that ruling was announced, more importer/exporters of these extrusions have come forward to rebut the DOC’s decision. We believe we have successfully addressed those issues and expect the DOC to stand by their preliminary decision. However, as an industry we should brace ourselves for an appeal, which is likely to come.
Next, the pallet case is nearing its final decision date. We expect that decision later this month. Around the first of the year, the DOC decided the pallets in question that are made of 1000-series alloyed extrusions are subject to duties. In that decision, the DOC opened the door for another submission if other alloys are being used. We did learn that pallets are also made from 6000-series alloyed aluminum extrusions. So, we re-filed the case. There has been some rebuttal to our petition, but again, we believe we have successfully dealt with those arguments. Furthermore, keep in mind that Customs seized a reported $25 million worth of these pallets as they await the DOC’s decision.
Finally, the 5th Administrative Review is at its mid-point in the process. So, the DOC announced its preliminary decision for AD and CVD rates. The new AD rates are proposed to 86% and the new CVD rates are 16%. The new combined total of 102% is a big improvement from the 40-45% range we have seen in recent years.
As you can see, our base case is poised to close a few open issues and we are in a position to deal with trade enforcement issues. We may have a shot with the 232 Investigation to get there sooner. Regardless, it is certainly the next big thing to tackle.
In summary, things are going well for us and our case. The duties appear to be on the increase, we’ve won the preliminary decisions on our key challenges, and we won our Sunset Review. With your continued support, we can keep the momentum!
With the Sunset Review clearly in our rear-view mirror, we turn our attention to three main issues that are still unresolved. First, we await word from the Department of Commerce (DOC) concerning our circumvention case against Zhongwang and other exporters of these so-called 5050 alloy aluminum extrusions. Earlier this year, in its preliminary ruling, the DOC ruled that 5050 extrusions were covered by our orders and declared the import of such products a circumvention scheme. Since that ruling was announced, more importer/exporters of these extrusions have come forward to rebut the DOC’s decision. We believe we have successfully addressed those issues and expect the DOC to stand by their preliminary decision. However, as an industry we should brace ourselves for an appeal, which is likely to come.
Next, the pallet case is nearing its final decision date. We expect that decision later this month. Around the first of the year, the DOC decided the pallets in question that are made of 1000-series alloyed extrusions are subject to duties. In that decision, the DOC opened the door for another submission if other alloys are being used. We did learn that pallets are also made from 6000-series alloyed aluminum extrusions. So, we re-filed the case. There has been some rebuttal to our petition, but again, we believe we have successfully dealt with those arguments. Furthermore, keep in mind that Customs seized a reported $25 million worth of these pallets as they await the DOC’s decision.
Finally, the 5th Administrative Review is at its mid-point in the process. So, the DOC announced its preliminary decision for AD and CVD rates. The new AD rates are proposed to 86% and the new CVD rates are 16%. The new combined total of 102% is a big improvement from the 40-45% range we have seen in recent years.
As you can see, our base case is poised to close a few open issues and we are in a position to deal with trade enforcement issues. We may have a shot with the 232 Investigation to get there sooner. Regardless, it is certainly the next big thing to tackle.
In summary, things are going well for us and our case. The duties appear to be on the increase, we’ve won the preliminary decisions on our key challenges, and we won our Sunset Review. With your continued support, we can keep the momentum!
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