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 Commerce ruled that the window shapes being sent to the Dominican Republic from China were, in fact, covered by the scope of our orders. This clear-cut victory will stop that program and return that volume to domestic producers. It should also help deter future schemes.
Last week, the Vietnamese reported they had stopped shipments from China destined for the U.S., valued at $4.3 billion. The sheer size of this scheme will remind many AEC members of the billion-plus pounds of extrusions we saw in Mexico, the hundreds of millions of pounds of fake pallets pouring into the U.S., and the stockyard of extrusions estimated at one-half billion pounds in Malaysia. Details about the bust have been hard to find. However, we have alerted the Department of Justice about the incident. There is no doubt that the AEC’s circumvention case against Vietnam is encouraging that government to take these matters more seriously. The last thing Vietnam wants is for us to launch a full-blown case against their extrusion industry, as Australia has done.
The AEC continues to monitor import levels. As reported last month in this space, the AEC Fair Trade Committee members have volunteered their production and sales data to our attorneys, so we are well prepared to take action should the need arise. If you would be willing to participate in this process, please let me know. During our last fall conference we discussed the almost certain threats a slowing global economy would mean for the AEC in the trade arena. With the Dominican Republic and Vietnam decisions this month, it didn’t take long to find out we were right.