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Fair Trade: May 2010 Update

China Import Update — May 28, 2010

A coalition of U.S. extruders, known as the U.S. Aluminum Extrusions Fair Trade Committee, has been formed for the purposes of evaluating and, as necessary, defending the U.S. aluminum extrusion industry from being manipulated by alleged unfair trade practices from importers. This Committee is not part of the Aluminum Extruders Council, but we do support its work and its goals.

Below you will find updates regarding the petition the U.S. Aluminum Extrusion Fair Trade Committee filed 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.

Update as of May 28, 2010

As we reported in April, the U.S. Aluminum Extrusion Fair Trade Committee 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. The ITC has now completed their preliminary investigation. We are happy to report that the case is advancing as expected. Here is where things stand, according to Steve Jones of King & Spalding, the Committee's lead attorney:
•On May 14, 2010, the U.S. International Trade Commission voted unanimously, 6-0, that there is a reasonable indication that the domestic aluminum extrusion industry is materially injured by reason of dumped and subsidized imports from China. This concludes the ITC's preliminary investigation. The public report and decision are expected to be released in mid-June.

•Based on the ITC's affirmative determination, the U.S. Department of Commerce will now investigate the extent and magnitude of dumping and illegal subsidization in connection with imports of aluminum extrusions from China. The dumping and subsidy investigations will be conducted simultaneously.

•The preliminary determination in the subsidy case is currently scheduled for June 24, 2010, but that deadline likely will be extended by 65 days, to early September. The preliminary determination in the antidumping case is currently scheduled for September 7, 2010, but that deadline could be extended by another 50 days, to late October. Whether the cases are extended depends on whether an extension is requested by the petition and Commerce decides that the case is extraordinarily complicated.

•Imports from China will be potentially subject to antidumping and/or countervailing duties as of the date of the preliminary determination in the respective investigations. The law requires U.S. importers to post a bond in the amount of duties determined by the preliminary determination if the merchandise enters the United States after publication of the preliminary determination. U.S. Customs has a duty to collect the duty on each entry if antidumping or countervailing duty order (or both) is imposed. Thus, merchandise entering the United States after the preliminary determinations are published is potentially subject to duties.

•While it might seem that this system creates an incentive to import subject merchandise prior to publication of the preliminary determinations in order to avoid the application of duties, a provision in the law called "critical circumstances" is intended to prevent this by giving DOC the authority to impose duties on subject merchandise entering the United States up to 90 days prior to the preliminary determinations. This "retroactive" assessment of duties can occur if Commerce determines that there has been a surge in imports, the importer knew, or should have known, that the imports were sold at less than fair value, and the ITC determines that this surge in imports will undermine the remedial effect of the order. Thus, there is a legal provision that is intended to prevent a surge in imports after the petition and prior to the preliminary determination of dumping and/or subsidies.

•The rates determined by Commerce in the preliminary determination remain in effect until Commerce's final determination, which should take place in approximately March 2011. At that time, the rates determined in Commerce's final determinations become the rates to which imports after that date are subject.

•If the ITC reaches an affirmative determination in its final investigation, antidumping and countervailing duty orders will be imposed.

AEC's position remains that we are in favor of free and fair trade worldwide. We believe that this petition process will go a long way toward restoring fair trade in the United States aluminum extrusion industry and strengthening the long-term outlook for extruders and the customers they serve. Thank you for your interest in this topic and your participation in the aluminum extrusion industry.