It has certainly been an interesting summer for our trade orders. We have had several very favorable decisions in our case. In fact, one might say we ‘ran the table’. Here is a summary of those decisions.
At the end of June, the Department of Commerce (DOC) issued its preliminary decision in their Fifth Administrative Review of the duties being applied in our case. In that decision the DOC established a new tariff level of 86% on the antidumping (AD) side, and 20% in the countervailing duty (CVD) case for a combined tariff of 106%. This is nearly double what was calculated last year. This is especially impactful in circumstances where kits are being imported. Because the extrusions are the only item taxed in a kit, or say, a curtain wall unit, the other elements of the kit may be subsidized by the Chinese enough to offset the extrusion tariff on the extrusions. We have every confidence that the DOC will stick with these numbers when they announce their final determination later this year.
The DOC made a decision in the fake pallet case, and the 5050 alloy circumvention scheme. Both were in our favor. Having seized a reported $25 million worth of fake pallets, the scope ruling that they are covered by our orders opens the door for Customs and the DOC to decide how duties will be applied to those items. Given the extent of this scheme, penalties could be staggering. In the 5050 case the DOC held to their preliminary decision that 5050 alloyed extrusions will be covered by our orders. We have been receiving reports from across the country that orders have already been coming back to domestic extruders.
With all of this momentum at our backs, it is has been quite difficult to get our heads around the magnitude of the threat to our industry being posed by the Trump Administration’s 232 investigation. As previously written, there are petitioners in this matter that are asking that tariffs be placed on all imported primary aluminum. We have heard suggested tariff rates from 2% - 30%. As an industry, we simply cannot afford to pass through a duty to our customers that ultimately compete in a global economy. Imagine how difficult it will be for your customers to win business against foreign OEMs that don’t have that tariff embedded in their costs. This is an issue we will be discussing in Denver at the Aluminum Anodizing & Extrusion Summit next month.
On the other hand, the 232 also presents a real opportunity for us to persuade the Administration that the real enemy is China and that any remedy should be focused on them. Additionally, we need to make the case that any country that allows China to use them as a third party to circumvent our orders should also have duties placed on their exports to the U.S. We are working with other groups now to form a consensus around this issue. This too will be addressed in Denver.
In total, it’s been a great summer for our trade case. So, when we meet next month at our Management Conference we will certainly want to lift a glass in celebration for what we’ve accomplished, then roll up our sleeves and get to work on the 232.
At the end of June, the Department of Commerce (DOC) issued its preliminary decision in their Fifth Administrative Review of the duties being applied in our case. In that decision the DOC established a new tariff level of 86% on the antidumping (AD) side, and 20% in the countervailing duty (CVD) case for a combined tariff of 106%. This is nearly double what was calculated last year. This is especially impactful in circumstances where kits are being imported. Because the extrusions are the only item taxed in a kit, or say, a curtain wall unit, the other elements of the kit may be subsidized by the Chinese enough to offset the extrusion tariff on the extrusions. We have every confidence that the DOC will stick with these numbers when they announce their final determination later this year.
The DOC made a decision in the fake pallet case, and the 5050 alloy circumvention scheme. Both were in our favor. Having seized a reported $25 million worth of fake pallets, the scope ruling that they are covered by our orders opens the door for Customs and the DOC to decide how duties will be applied to those items. Given the extent of this scheme, penalties could be staggering. In the 5050 case the DOC held to their preliminary decision that 5050 alloyed extrusions will be covered by our orders. We have been receiving reports from across the country that orders have already been coming back to domestic extruders.
With all of this momentum at our backs, it is has been quite difficult to get our heads around the magnitude of the threat to our industry being posed by the Trump Administration’s 232 investigation. As previously written, there are petitioners in this matter that are asking that tariffs be placed on all imported primary aluminum. We have heard suggested tariff rates from 2% - 30%. As an industry, we simply cannot afford to pass through a duty to our customers that ultimately compete in a global economy. Imagine how difficult it will be for your customers to win business against foreign OEMs that don’t have that tariff embedded in their costs. This is an issue we will be discussing in Denver at the Aluminum Anodizing & Extrusion Summit next month.
On the other hand, the 232 also presents a real opportunity for us to persuade the Administration that the real enemy is China and that any remedy should be focused on them. Additionally, we need to make the case that any country that allows China to use them as a third party to circumvent our orders should also have duties placed on their exports to the U.S. We are working with other groups now to form a consensus around this issue. This too will be addressed in Denver.
In total, it’s been a great summer for our trade case. So, when we meet next month at our Management Conference we will certainly want to lift a glass in celebration for what we’ve accomplished, then roll up our sleeves and get to work on the 232.
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