With the news that U.S. Customs did, in fact, reverse itself in the Enforce and Protect Act (EAPA) petitions filed against Kingtom, it seems as though the EAPA program is in jeopardy. When the EAPA program was initiated, the Federal Government intended to blend the best aspects of the Department of Commerce and U.S. Customs and Border Protection’s fight against illegal trade. Suspected circumvention/transshipment activity would be handled in a transparent way with critical deadlines to ensure the investigation stayed on course. Furthermore, the evidence required needed to meet a “preponderance of the evidence” standard versus “beyond a reasonable doubt” standard. Because of these changes, the AEC and many other U.S. industries in trade disputes, embraced the EAPA program and has filed more than 10 EAPA claims since its inception. Our success rate has been very high, and we believe it did affect trade activity and benefitted the domestic industry.
However, Customs recent voluntary reversal of its decisions in all three EAPA filings against Kingtom indicate that the program may have slid back into the traditional E-Allegation program used by Customs for years. That program has been dubbed the “Black Box”. Once you file your claim, you never hear a word. Years ago in Puerto Rico, transhippers were allowed to continue activities despite several complaints by the AEC of illegal trade activities. Ultimately, Customs did bust the illegal activity but not until the ravages of that activity took its toll and forced the extruder in Puerto Rico to close operations. We simply cannot compete against cheaters when our own government reacts so slowly to clear and enforce obvious trade violations.
I want to thank AEC members that reached out to their elected officials and helped rally our cry. While unsuccessful, we have been able to carry the message that the EAPA program is in jeopardy, and we will need to understand the new rules before we expend valuable resources to file a new claim.
This doesn’t mean our fight with Kingtom is over. Kingtom has been found guilty of worker abuse, and we have filed a Withhold Release Order with Customs demanding that they apply U.S. law and forbid Kingtom from selling their merchandise in the U.S. We are hoping Customs sees that as a new and legitimate path to addressing the illegal activities of this Chinese plant born out of China’s Belt and Road program.
Elsewhere, we are preparing for this summer’s 232 Hearing addressing tariffs. We will be speaking at the hearing and requesting that the 232 program reinstate our extrusion tariffs, make changes to the exclusion process that make us eligible to object to exclusion requests, and allow the AEC to speak on behalf of the industry and empowered to file objections itself. If Commerce will allow our requests, all aluminum extrusion shipments will once again be subject to the 10% tariff on the total value of the imported extrusions. Unfortunately, the duty would not extend to countries that have been given a permanent exclusion, such as Mexico. However, it will address several other countries whose imports continue to grow.
Lastly, in case you missed it, our trade orders against China have been extended for another five years. Technically, we have one more filing to make, but there is no drama involved. The International Trade Commission is running behind and asked for our filing later this summer, due to their backlog of work. This is great news for us and the industry. It shows that our good work can be preserved with a lot of hard work, dedication, and persistence. We aim to take that same attitude with the setbacks we’ve seen in the Kingtom matter.
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