Skip to main content

Trump Not Interested in ‘Saving’ the Aluminum Market & Cheaters BEWARE!

On Thursday, May 31, President Trump announced that he is “taking action to protect America’s national security from the effects of global oversupply of steel and aluminum” by imposing a 10% tariff on aluminum imports from some of our strongest allies and aluminum industry partners: Canada, Mexico and the European Union.  The implementation of these tariffs follows “extensive discussions and a months-long process” after the initial proclamations in March. In an article posted on whitehouse.gov, the statement notes that “[the] President made it clear that the Administration was willing to work with those countries to find separate arrangements that would meet the national security requirements of the United States.” The statement goes on to read, “Current quantities and circumstances of steel and aluminum imports into the United States threaten to impair national security. These excessive imports are driven in large part by the worldwide glut from overproduction by other countries.”

Really?! So, Trump is going to punish our allies, hurt the American economy and threaten American jobs while China gets a pass.

Once again, the administration is proving it has no ambitions to ‘save’ the aluminum market.  While the domestic market is silent about the supposed ‘ramp up’ of domestic production, our government pushes forward with policies that continue to isolate our market and drive prices disproportionately higher versus the rest of the world.  Trump’s announcement to include the E.U., Canada, and Mexico to countries on which he will place a 10% tariff demonstrates how out of step he is to our industry’s needs and threats.  While the entire U.S. aluminum industry has screamed that China is the sole threat to our industry, the administration decides to bail out ZTE.  The only silver lining is that he did NOT choose to enact quotas…yet. 

In other news…

Cheaters BEWARE!
I trust you have seen the recent flurry of trade enforcement activity from the AEC in recent weeks.  These results are the due to the renewed focus the AEC’s Fair Trade Committee has had on trade enforcement issues.  It has been tough at times to maintain that focus with all of the noise out of Washington D.C., which we’ll discuss later, but nevertheless, the Committee has continued to push enforcement in the background.

Our first announcement came with the Vietnamese Circumvention case.  Now that case has moved past a preliminary decision and into the full investigation.  In the preliminary decision, Commerce found good cause for the case and has extended duties to Vietnamese exports to the U.S.  Those shipments will be subject to the same duties as our China case.  We expect this to hold up in the final determination, which should be announced by the end of this year.

Next, you saw the announcement that the AEC submitted its first-ever transshipment case to the new Enforce and Protect Act (EAPA) program.  This case involved shippers from Malaysia that simply relabeled Chinese extrusions and shipped them to the U.S.  We started working on this case last fall.  It came from a referral from the International Fair Trade Alliance.  So, our recent announcement informed everyone that EAPA has made its preliminary decision and will begin to impose duties on imports from those companies.  We can’t know for certain, but typically the investigation will extend to those in the U.S. that ultimately bought the extrusions.  In the False Claims Act in Florida a few years ago, the manufacturers that ultimately used those extrusions had to pay back duties and fines.  We will have to wait and see how this one settles.

Shortly after our filing, there was another case brought to EAPA regarding door thresholds.  As you should know, there is an active scope challenge underway about door thresholds.  So, the timing of this claim and EAPA’s decision to move forward with that investigation gave us a one-two punch.
All I can say publicly at this point is that there will be more!  So, continue to let me know of any cases you are seeing in the field.  The AEC has expanded its toolbox, and may be able to help.

The other elements of our case have moved along well.  We still await the preliminary results for this year’s administrative review, but expect the rates to stay at 86% AD and 20% CVD.  We did get the court decision on the two appliance handle cases.  One of them was a big win for us, the other, not so much.  However, we will be filing a motion with the second case as the final decision was full of contradictions.  The importance of this is that we would like strong language from the courts that could allow us to go back and fight for some applications we previously lost.

Elsewhere, the industry seems to be normalizing the ongoing chaos from the Russian Sanctions and the 232 Investigation.  News reports suggest RUSAL is working hard to get out from underneath the Russian Oligarch.  If successful, I believe there will be a large sigh of relief from the industry.  While some extruders may be in a stronger position because they didn’t use RUSAL, the long term implications of RUSAL being unable to ship into the U.S. appears to be problematic.  Others disagree, and believe metal units will flow to the U.S. to cover the gap, and RUSAL will backfill the needs of the countries that lose units to the U.S.  Time will tell.

However, the 232 Investigation seems to have no end in sight.  Each month, the President will be deciding whether or not to extend any exclusion.  If he doesn’t, he is ‘offering’ tariffs or quotas.  For the most part, the industry seems to have reconciled itself to the 10% tariffs.  That is not the case with quotas.  On this point, the AEC will continue to speak out against any attempts to restrict growth for our industry.  The most recent Aluminum Association reports show a near 10% growth in shipments for our industry this year to date over 2017.  We need the metal to keep this growth on track! In the short run, the greatest threat to us doing that is access to metal!  If you have a story to tell on this matter, please let me know.  Those ‘proof points’ are being heard in D.C.!

In summary, please let HQ know of trade enforcement issues you find in the field.  We are better equipped now to handle them, and have a government agency looking to help us.  Also, keep me informed on metal issues.  When I am in D.C. or fielding calls from the media, it helps our story to have real life examples.

As always, thank you for your continued support!


Comments

Popular posts from this blog

Fair Trade Update: Curtain Wall, Door Thresholds & Vietnam

Well, our year is off and running with a bang. Scope issues, Administrative Review, and circumvention top our list in early 2018.

This month we learned that there will be an appeal in the curtain wall scope case.  Permasteelisa and Jangho filed a notice of appeal last week.  It is expected that Yuanda will almost surely file their own notice of appeal by the deadline, which is February 12. The Chinese industry signaled that they would appeal in a recent article in US Glass magazine.   

Additionally, our scope challenge related to door thresholds continues to move forward.  This is a significant case because door thresholds are expressly mentioned as subject merchandise in our trade orders.  So, to lose this application could open the door to many applications clearly covered by our case.  Finally, we continue to await the judges’ (there are more than one judge at the CIT) decision in the appliance handles cases we defended last fall.  We believe we will win.  However, we are mostly i…

Heating Up & Settling Down: The Dichotomy of our Trade Case

The agenda for our trade case continues to be driven by transshipment/circumvention issues and the 232 Investigation.  Meanwhile, our ‘base case’ is so quiet that we’ve been able to free up budget dollars from the Administrative Review to finance our circumvention case against Vietnam.

The Administrative Review is now complete.  The final rates determined by the Department of Commerce are 86% for countervailing duty (CVD) and 16% for anti-dumping duty (AD).  The total of 102% is our highest rate since we first filed the case.

Scope issues have calmed down a lot.  In fact, only the curtain wall case, the appliance handles case, and door threshold cases are on the front burner.  Reports from the hearing for the curtain wall case were very positive.  The attorney leading that effort, David Spooner, is quite confident we will win this round.  Of course, we fully expect another appeal from the Chinese.  We are awaiting the decision from the judge in the appliance handle cases and believe w…

AEC Duties Unchanged; “Trumponomics” Impacts Extruders

Our 6th Annual Administrative Review results have been announced.  As previously reported, the Department of Commerce (DOC) maintained extrusion tariffs at 86.01% for our subsidy, or countervailing duty (CVD), case and 20% for our anti-dumping (AD) case.  The combined duty of 106% has been stable since 2016.  This is a good number for the industry, which continues to contain Chinese aluminum extrusion at less than 1% market share. Furthermore, the DOC also assigned the Adverse Facts Available (AFA) rate of 198.61% to the two mandatory respondents, Liaoning Zhongwang Group Co., Ltd. and Liaoyang Zhongwang Aluminum Profile Co. Ltd., which has been the AFA rate since the 5th review.  The 7th Annual Administrative Review has begun with the selection of mandatory respondents. 

Elsewhere in our case, there is nothing new to report on the scope issues we are battling.  We continue to wait for court dates or decisions depending on the matter.  Our trade enforcement actions and results have ma…