For all the recent focus U.S. extruders have had on a new trade case, we need to remember we still have an active trade case against China. In that case, the AEC won a big victory at the Federal Circuit court last month in our solar mounting case.
The Federal Circuit upheld the Department of Commerce’s (DOC’s) scope ruling finding that CCM’s solar panel mounts are covered by the scope of the orders and cannot be excluded as “finished merchandise.” As you may recall, we actively opposed CCM’s scope exclusion request at Commerce and filed substantive briefs throughout this appeal to assist the Government in defending the agency’s decision. The Federal Circuit agreed that the solar panel mounts are parts or subassemblies for a downstream product – the solar panel mounting system – and thus are not a finished product that qualifies for exclusion. The Federal Circuit’s opinion makes clear that parts or subassemblies cannot qualify for the “finished merchandise” exclusion and that subassemblies may be excluded from the scope only if they are imported as part of a “finished goods kit.” It has been a long and winding road, but this opinion finally solidifies Commerce’s revised approach to subassemblies confirming that subassemblies are, in fact, subject to the scope of the orders. This will be an important precedent moving forward and is a very positive sign in our recent appeal of the door threshold scope decision.
For years we have been back and forth with the DOC about which products are considered ‘final, finished’, or subassemblies, etc. Depending on the nature of the Administration in power at the time, we have found a wide variance from Commerce officials. However, in the courts, the definition of ‘final, finished’ and its relationship to ‘subassemblies’ has become clearer. As a result, Commerce must now abide by the court’s interpretation and adjust other rulings accordingly.
Our trade orders have become legendary at the DOC. Never has there been a trade case that has ever come close to the number of scope challenges we have faced since filing our China orders in 2010. The courts have acted over time as the final interpreter of our orders and are very close to making a determination in a given scope challenge very easy for Commerce. This is very important to us on two levels.
The first is in the China case itself. We needed this win. Nothing has protected our industry more than the scope of our orders. Capturing downstream operations in the scope protects our presses, paint lines, anodizing tanks, and fabrication departments. We all know that the price discrepancies between the U.S. and China grow as the value-add increases. So, protecting our scope is huge.
Secondly, this is significant if we choose to launch a new trade case. Having ‘trained’ the U.S. government about ‘final, finished’ and subassemblies, it should be much easier in a new case to settle these types of conflicts. In a new case, I expect scope challenges from all the end-use categories we received from the Chinese industry. The expectation is that all this work in the China case will translate to the new case and save us from scores of challenges with only ‘so-so’ chances of winning.
It's important for us to understand how our work in the China case effectively sets up for wins in a new case after it’s filed and won. Defending orders is every bit as difficult, or even harder, as winning it. This work we are doing in our China orders will pay dividends should we move forward.
Thank you for your support! If you have questions about this matter, or trade in general, please contact me at jhenderson@tso.net.
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