Import duties have helped aluminum extruders return to profitability—but the fight for fair trade continues

April 2016 - By the end of 2008, virtually all U.S. industries were reeling from the effects of the financial collapse that brought on the Great Recession. Aluminum extruders felt an added impact when Chinese companies began to dump extrusions into the U.S. market. The dumping continued so that by the end of 2009, Chinese extruders captured nearly 20 percent of what was left of the domestic market. The one-two punch of the recession and cheap imports ultimately eroded 40 percent of U.S. aluminum extrusion market capacity. 

At this point, the industry came together under the auspices of the Aluminum Extruders Council (AEC), to seek protection by filing anti-dumping and countervailing duty complaints with the U.S. Department of Commerce against the People’s Republic of China. With preliminary rulings in full effect, the dumping virtually came to an end by October 2010—Chinese extrusions dropped from 25 percent of the U.S. market to less than 1 percent in less than one month.

Eventually, final orders were issued in both the anti-dumping and countervailing duty cases. Currently, the tariff is set at 106 percent and acts as an effective deterrent to the unfair and illegal trade activities of certain Chinese producers and traders. 

Questions of scope

The interpretation and application of the orders has been more contentious, the scope of which includes extrusions with any type of exterior finish, fabricated extrusions and kitted extrusions—as long as the kit does not comprise a finished good. The example given is a kitted window system without glass. If the kit contains glass, then it is not covered because it is considered a completed window. The term “finished product” leaves plenty of room for interpretation, which adds to the complexity. However, over time Commerce has made enough rulings so the domestic industry has a better idea of what will be ruled in or out of scope. Even so, there are two issues the industry continues to fight.

The first is curtainwall. More than two years ago, Commerce decided that curtainwall was definitely in scope and therefore covered by the orders. Chinese extruders appealed this decision several times and lost. Just recently, the Court of International Trade remanded that decision back to U.S. trade authorities and ordered them to revisit this issue. Our industry is confident that the preponderance of evidence on the record will ultimately prevail. The second key decision concerns so-called 5000-series alloyed extrusions. Chinese extruders ship what they claim is a 5000-series extruded product into the U.S. but test results show it has been heat-treated. The Aluminum Association placed testimony on the record confirming that 5000-series aluminum alloy is not heat-treated. The manipulation of 6000-series alloyed products in order to evade duties is either a clear case of circumvention or a souped-up 6000-series product that should be covered by the scope of the orders. We expect Commerce to resolve these open issues.

The domestic industry will also submit data to U.S. trade authorities to extend the import duties for another five years. The record will show  the orders have been wildly successful in enabling the domestic industry to return to profitability. Extruders have reinvested $1 billion of those profits into capital projects nationwide. Such investment has prepared extruders for the increasing demand for their products in automotive, renewable energy, electronics and many other applications. Without that investment, the U.S. aluminum extrusion industry would have fallen behind the world in technology and capability. We are confident the U.S. government will see these orders as the foundation on which the growth of our industry has been built and renew them for another five years.

To learn more about this case visit www.AECFairTrade.org. MM

As director of operations at the Aluminum Extruders Council, Jeff Henderson directs and manages the Fair Trade Committee, which successfully petitioned the U.S. government for free and fair trade action against China in 2011. He is also owner and president of The Sanford Organization (TSO), an association management company that runs AEC, the Aluminum Anodizers Council, the National Plasterers Council and several other trade organizations.