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A Gathering Storm Fueled by Disappointment

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 You do not have to tell U.S. extruders what it feels like to be under a deluge of imports.  The industry went through this 14 years ago with China.  Now, it is happening again.  This has been a slow buildup starting back in 2018-2019.  After the Aluminum 232 began, we did see a dip in imported extrusions.  However, by mid-2018 the protection began to fade.  Just prior to the chaos brought upon us by the COVID pandemic, the U.S. government inexplicably dropped the extrusion tariffs and the flood gates started opening.  Since late 2020 we have seen the domestic market percentage of the U.S. market collapse to a level we have not experienced since 2010 – the last year before the China tariffs took full effect.

We made every effort to thwart this trend.  When we identified imports as eligible to be covered by our orders, we made a scope challenge.  When we identified imports as transshipment or circumvention, we made an  Enforce and Protect Act (EAPA) claim.  We petitioned the Department of Commerce (DOC) to stop the bleeding caused by the Generally Accepted Exclusions (GAEs) being initiated and thus dropping our 232 aluminum extrusion tariffs.

All of this, AND we still see imports climbing at an alarming rate.  In fact, they appear to be gaining, momentum!  This makes sense to those of us in the business.  We do not start out supplying a five million-pound-a-year customer by shipping five million pounds to them in the first year.  No, you tool up a piece of their business, and grow from there.  We are seeing them grow!

While I can report that the remaining EAPA petitions in our queue appear to be heading in the right direction, I must admit, I am not impressed.  After what happened in the Kingtom case, why should we be?  I am hopeful that these recent filings will be on target for where the DOC has reset the goal posts.  But what will keep them from moving them again?  And how much money (and time) will it take before we know?

As the president of the Aluminum Extruders Council, I have a duty to be sure we have explored every avenue, exhausted every opportunity, and done everything we could possibly do to prevent another trade case.  No one wants that.  Trade cases are expensive to file and maintain.  They consume a huge amount of time and focus on Council business.  They are truly our last resort.

We do know that we have the power to impact our industry.  We know that from our experience.  We can file a compelling case and restore those orders to our plants.  So, while the cost will be high, the return on investment is huge.  Furthermore, inaction could cost us everything.

For those extruders participating in this process, it is an absolute MUST that we get your fourth quarter 2022 data very quickly.  The faster we have the data, the sooner we can assess our case.  Once we have those facts, we can make the big decision.

For the participating extruders, the AEC hosted a webinar in January to review the Q3 data.  The situation is deteriorating, and the outlook is bleak.  We expect Q4 data to be even worse.  I do not have to tell you that.  I can see you know it in those numbers.  

So, it will boil down to this.  Do we want to move forward, or do we want to wait?  That is a question only you can answer.  I know what I would say if I were a business owner in the extrusion industry, especially if I had invested millions of dollars in expansion.  However, it is NOT my call.  It is yours.

Therefore, we will meet in March at the Annual Meeting on Thursday, March 16, 2023 in Palm Desert, California.  We must decide yes, no, or wait.  It is your choice.  I will see you there.


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