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Fair Trade Update: 232 Tariff Impacts Alarming Members, Foreign Imports Rising

Most of the activity this month related to fair and free trade was external to our ongoing trade cases against China.  Reports of increasing threats to the North American market from other countries continue to grow, and there is clear uncertainty about the impacts of the 232 tariff exemptions for Canada and Mexico on the U.S. industry.  I’ll come back to that in a minute, but first, let me catch you up on issues that did involve our China case.
The 8th Annual Administrative Review is now underway.  Having virtually no opposition from the Chinese industry in either our Anti-Dumping (AD) or Countervailing Duty (CVD) cases, we have withdrawn most of our efforts.  Instead, we will be focus on individual Chinese exporters whose duties we think we can cause to be increased.  This is an efficient use of our resources and similar to the strategy we’ve deployed in recent administrative reviews.  As a result, we expect the base rates to stay the same, which are approximately 86% for the AD case…

The AEC’s Multi-Front Trade War

Since 2011, the U.S. aluminum extrusion industry has benefited from some of the most effective trade orders ever issued by the U.S. government.  During that time, Chinese imports as a percentage of market share has dropped from 25% to less than 1%.  So, manning the desk at the AEC that handles trade orders should be a pretty quiet job, right?  Well, not in the last 30 days!

The impacts of China’s unrelenting overproduction and continuing investment in new capacity is effecting markets all over the world, and in some of those cases, this translates into new imports from these countries into North America.  China’s actions are displacing local production in other countries, which in turn are forced to find new markets for their extrusion production.  In other cases, China has invested in new extrusion plants in these countries as a part of their ‘One Belt, One Road’ initiative.  However, this month we were witness to China’s favorite play: circumvention.

As we reported, the Department of…

The Rising Threat of Aluminum Extrusion Imports

I want to thank everyone who attended our breakout session about the rising threat from imported aluminum extrusions.  In that session we examined the data in this matter.  There has been clear growth in imports from a variety of countries. In recent years we’ve seen higher market penetration from Vietnam and Malaysia, but now, we see the threat from the Caribbean and other Southeast Asian countries.  As discussed in the meeting, the AEC’s law firm in our China case, Wiley Rein, is collecting data from AEC members in order to track these imports and the impacts on our businesses and industry.  If you’d like to participate in this data collection, please contact me for details.
While I can’t comment in this forum on about our next steps, let me assure you that we are acting.Imports from the Dominican Republic are particularly worrisome.The Chinese owned and operated facility in that country appear to signal a new tactic by the Chinese industry.By investing in third party countries to …

Terrific News for the AEC

This month we received two terrific decisions out of Washington D.C.  The first was the report by the Wall Street Journal that Liu Zhongtian, founder of China ZhongWang, has been indicted by a federal grand jury on charges that he evaded nearly $2 billion in tariffs as part of a conspiracy to smuggle massive quantities of aluminum into the U.S.  The second was the final decision being made in our circumvention case against Vietnam.
First, Mr. Liu.  The AEC has been in a state of conflict with ZhongWang (ZW) since before we won our case.  ZhongWang and its affiliates were the number one exporter of aluminum extrusions into the U.S. prior to our filing.  Reports indicate that anywhere from 65-85% of all extrusions dumped into the U.S. from 2008-2010 were from ZW or its business affiliates.  Many of us will remember Peng Cheng, as one example.  Then the AEC exposed the perplexing mountain of extrusions produced in China and shipped to the Mexican desert, which led to the attempt to open…

Fair Trade Update

This month we will cover the latest developments in open matters within our case.Appeals and scope requests dominated our attention.
Three appeals were filed this month.The first is the Perfectus/Pallet case.Perfectus has appealed their loss at the Court of International Trade (CIT).We will work with the government in this matter to secure victory at the United States Court of Appeals for the Federal Circuit.In the Tai-Ao 5050 case, the CIT sided with the Department of Commerce (DOC) in their decision that 5050 alloys are covered by our orders.Now Tai-Ao has appealed this decision to the CAFC.We will work with the government on this case as well.Finally, the CIT is asking the CAFC to reject Jangho’s case.In light of the losses suffered by Yulanda in their scope cases, the CIT is asking the CAFC not to waste its time on this pointless appeal.I will keep you posted on these important cases.
We’ve also had some new scope challenges this month.Scaffsales, who sells scaffolding, stadium s…

Great News! The 5050 Appeal has been Won!

Since the industry won its 5050 alloy circumvention case, extruders across the country saw a return of orders from customers that went that direction.  With this case on appeal, there were legitimate concerns that all of this would be reversed.  However, the Department of Commerce (DOC) won its case at the Court of International Trade (CIT), and the industry is spared another round of disruption.  This is good news, indeed!

This win comes on the heels of our victory in the Vietnam circumvention case.  Since that preliminary decision was made, Vietnam has placed duties on Chinese imports.  We believe this in response to our circumvention case as reported here.

Also noteworthy: on May 1, 2019, the Department initiated anti-circumvention inquiries to determine whether imports of aluminum jalousie shutters that are processed in the Dominican Republic from window frame extrusions produced in China are circumventing the Orders. The Department also self-initiated a scope inquiry to determine…

Work Focuses on Scope Challenges and Imports

This month our Fair Trade focus has shifted back to scope challenges.  At the same time, other issues are developing, which I will touch on in this report.  However, the key decision this month actually came from an adversary.  Whirlpool has dismissed its appeal in the appliance handle case.  This is a great development for us, as we have one less opponent in our quest to push the Department of Commerce (DOC) to return the interpretation of our scope back to the original language and its intent.  This decision from the courts confirms that the DOC cannot rule an item out of scope simply because it has additional non-extruded components.  It also reinforces the principle that a part cannot be ruled out of scope if it is a subassembly of a larger product.  These two issues are the legal pillars that will enhance our ability to keep more applications covered by our orders, and possibly seek a reversal from the DOC on items previously ruled out of scope.

One of those product categories in…

Scope of AEC Orders Gets Major Win

As you know, the success of the AEC’s trade orders against the Chinese aluminum extrusion industry has been built on the scope of our orders.  The AEC orders cover aluminum extrusions including fabricated, finished, and even kitted products as long as the merchandise in question does not make a final complete product.  This scope has enabled us to protect end uses such as curtain wall, door thresholds, window and door kits, and a whole range of products extruders routinely produce.  However, in 2016 the Department of Commerce decided in the side mount valve case that ‘final and finished’ must include sub-assemblies.  This decision caused a shift in the DOC’s views about which products would be covered by our orders.  Consequently, we saw solar mounting systems, as well as several tube, pipe, and pole products be excluded from our case.  This also breathed life into more scope challenges as importers saw a chance to get their sub-assemblies excluded as well.  One such product that fell…

Scope & Trade Enforcement Issues Dominate our Efforts

This month’s update will cover the key events related to the scope of our tariff orders.  This is the arena we’ve been focused upon in the last month.  Even so, we continue to work on trade enforcement issues, which I will also address.

There are three scope issues worth noting.  The first is the door threshold case.  Challenged by three importers, door thresholds with Chinese aluminum extrusions that were fabricated in either China or Vietnam were under review.  As reported in our trade alert in mid-January, the domestic industry prevailed in this matter.  It was an important victory because our trade orders specifically mention door thresholds as covered merchandise.  To have lost this case would have meant all aspects of our orders could be vulnerable to scope challenges.  It is also noteworthy to mention the penetration these importers had into the domestic product.  Some reported they had become the second, third, and fifth largest sellers of door thresholds in the U.S. This repr…

Keeping You in the Loop on AEC Fair Trade Issues

Since my last update, a few issues have been settled, and a couple more are pending.  I’ll use this update to bring you into the loop.  The curtain wall case has a hearing date (finally), our work with the EAPA program has shut down two operations, and the industry awaits a final decision in the RUSAL sanctions issue.  Meanwhile, there is no indication from the administration that they plan to grant Canada and Mexico an exclusion from 232 tariffs.

Curtain wall has been a big issue in the fair trade case in recent months.  The long awaited ‘final’ appeal on the scope decision to keep curtain wall covered by our orders has been set.  The Court of Appeals for the Federal Circuit has scheduled oral argument on the Chinese exporters’ appeal of the Court of International Trade’s ruling that imports of Yuanda’s curtain wall units are subject to unfair trade tariffs on aluminum extrusions.  Oral arguments will be held at 10:00 a.m. on Tuesday, February 5th at the Court (717 Madison Place, NW,…