Department of Commerce Finds Chinese Aluminum Extrusion Imports are Being Subsidized Significantly

September 14th, 2010 by DWM Magazine

Earlier this year the U.S. Aluminum Extrusion Fair Trade Committee, a coalition of U.S. extruders, filed a petition with the U.S. International Trade Commission (ITC) and the U.S. Department of Commerce (DOC) for redress from alleged unfair trade practices involving aluminum extrusions imported from China. Now, in a positive step forward for the U.S. aluminum extrusion industry, the U.S. Department of Commerce (DOC) announced its affirmative, preliminary determination that imports from China are benefiting from various subsidies that are countervailable under the law. This means that countervailing duties may be applied to imports to offset these subsidies and remedy the unfair trade. Based on this preliminary determination, imports of aluminum extrusions from China will be subject to cash deposits or bonds ranging from 6.18 percent to 137.65 percent of the entered value of the merchandise. If the case ultimately is successful and a countervailing duty order is imposed, imports after this preliminary determination will be subject to countervailing duties.

Likewise, importers could also be liable for countervailing duties on imports of aluminum extrusions from China.

Brent Slaton is the national sales coordinator for Keymark Corp., an aluminum extrusion company, and also is actively involved with the American Architectural Manufacturers Association’s Aluminum Material Council. He says the U.S. available aluminum capacity is currently running at about 60 percent.

“It’s a 3 billion pound market a year,” says Slaton. “Last year China exported extrusions of 192,000 tons into the United States. That equates to close to 500 million pounds.”

With the DOC’s recent determination, the bonds on exports coming into the United States can be viewed as a positive step forward. Slaton points out that in the United States building construction materials make up the largest portion of those 3 billion pounds and about 1.3 billion of that is estimated to be doors, windows and curtainwall.

“With this change in effect, domestic producers won’t have to compete with subsidized metal and it will allow them to be more price competitive and profitable,” says Slaton. “It will also help create jobs and some of the presses that have been idle will hopefully start back up.”

“All our industry wants is for the rules to be enforced and to compete on a level playing field,” says Duncan Crowdis, chairman of the committee and president of Bonnell Aluminum. “The Commerce Department’s preliminary determination shows the extent to which the Chinese industry is receiving unfair government subsidies. U.S. producers cannot compete under these unfair conditions, and we need Commerce to apply duties to ensure that additional business and jobs are not lost due to unfair competition.”

Rand Baldwin, president of the Aluminum Extruders Council (AEC), adds, “The determination by the Commerce Department is a welcome leveling of the playing field. It will benefit our entire industry and all our customers. Bringing a fair trade case is always a risk. AEC salutes the U.S. Fair Trade Committee. This preliminary order vindicates, in a big way, the risk taken by the Committee. It also lends evidence to just how difficult an environment it had been for U.S. extruders.”

Based on this preliminary determination, the DOC will instruct Customs to suspend liquidation of imports of aluminum extrusions, and importers will be required to post a bond or deposit cash in the amount of the estimated duties. The DOC will then continue its investigation, conduct on-site verifications in China, and make final determinations.

In addition, the DOC is investigating whether imports are being sold at prices that are less than fair value (i.e., dumped) in a separate investigation. The deadline for the preliminary determination in the antidumping investigation is October 27, 2010.

Following Commerce’s preliminary determinations, the U.S. International Trade Commission will conduct a final investigation and determine whether the industry is injured or threatened with injury. If the DOC’s and the ITC’s final determinations both are affirmative, antidumping and countervailing duty orders will be imposed, and imports will be subject to antidumping and countervailing duties. The anticipated timing of the impositions of antidumping and countervailing duty orders is spring 2011.

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