The summer of 2022 has been a disappointment to our Fair Trade efforts. We continue to see our share of the domestic market shrink as foreign competitors enjoy a discount to U.S. aluminum prices, courtesy of the U.S. Aluminum 232. The lack of minimum aluminum content requirements in the USMCA is creating a new threat south of our border.
China’s Belt and Road strategy has established a growing extrusion operation in the Dominican Republic with rumors of more facilities to come in Latin America. Our trade case continues to battle key scope issues with an administration that seems to have a deaf ear to our position. Trade enforcement wins have turned to defeats without so much as an explanation. This horrible combination of self-defeating U.S. policy and an administration in place that has been the softest defender of U.S. industry since Obama that left us in a position that requires us to make some very difficult decisions.
The aftermath of Customs’ inexplicable reversal in all its affirmative Enforce and Protect Act (EAPA) decisions against Kingtom is perhaps the most difficult to swallow. Everything about this matter speaks of a bad actor established with one purpose only: to destroy the U.S. market. I want AEC members to know that this is NOT OVER! We are filing our appeal and will be sure we have our day in court. It’s not only the Kingtom issue that is at stake here. The broader issue is the degradation of the EAPA program. This has been an effective tool for us to fight trade violations. However, recent decisions in our cases, and those in other industries, make it clear that the goalposts have moved regarding what Customs will now accept as proof of evasion. Along with other industry leaders, the AEC is making its position known in every venue we can find.
Also, the Federal Government has asked for a commentary and an examination into the USMCA and how it is playing out in the market. The AEC will be participating in this process. We must make it clear to lawmakers that not requiring a minimum North American aluminum content in the U.S. automotive market is a clear threat to the heavy investment we have made to support the move to lightweight vehicles. We spoke about the ‘backdoor’ opportunity in Mexico for cheap Chinese aluminum to threaten our domestic market and its investments at the time the USMCA was negotiated. Now we know that is exactly what is happening. We cannot sit back and watch this occur.
Last month, I joined the aluminum panel during the 232 Hearings to discuss the impacts of the aluminum 232 on our industry. The discussion was lively and quite interactive, especially for a formal meeting like this. We know our points were heard and I continue to work behind the scenes to get access to the government officials responsible for this program and take our case right to them. It is the 232 that has become the lubricant allowing all these other schemes and policy reversals to injure our industry. As I said at the hearing, “In our world, spotting competitors a $.15 to .20/lb. price advantage upfront is akin to spotting Tom Brady two touchdowns in the fourth quarter!” Frankly, I think the hearing was nothing more than window dressing. That commission will finish its report from its findings and deliver it to Congress next March. That means the Congress that gets the report will be different than the Congress that requested it.
Concerning scope issues, last week oral arguments were held in the Reflections Window and Wall case. As you may recall, we lost this scope challenge and decided to appeal the decision. While confidence is high and we hope the courts will side with us, we must understand that we will be opposed by the importer AND the Department of Commerce, since it was Commerce’s decision and they must defend it. It will be a few months before we get the final decision.
From my seat in the auditorium, we can no longer depend on creative trade enforcement cases to protect us or rely on timely reversals from the government in counter-productive policies. The AEC is not without options. So, I really need you to come to the Fall Management Conference next month so we can discuss this in our breakout sessions, Town Hall, and then carry our message to Hill Day on Friday. I hope to see you there.
Thank you for your continued support. We have accomplished so much together, which gives me confidence that we can overcome these challenges as well! See you in D.C.!
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