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Fair Trade: September 2010 Update

China Import Update — September 7, 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 September 7, 2010

(Release from King & Spalding LLP)

The U.S. Department of Commerce ("Commerce") today announced its affirmative, preliminary determination in the countervailing duty investigation of aluminum extrusions from China. Commerce has determined that imports from China are benefiting from various subsidies that are countervailable under the law, which 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% 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. Thus, as of the date that this determination is published in the Federal Register, importers could be liable for countervailing duties on imports of aluminum extrusions from China.

Commerce initiated the investigation in April 2010 based on a petition filed by the U.S. Aluminum Extrusions Fair Trade Committee, a coalition of domestic manufacturers of aluminum extrusions, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union ("United Steelworkers"). The Committee and its supporters account for approximately 80 percent of production in the U.S. aluminum extrusions industry, and additional companies are continuing to sign on to support the effort. The United Steelworkers represent thousands of aluminum extrusion workers in the United States.

The Chairman of the Committee, Duncan Crowdis, the President of Bonnell Aluminum, Newnan, Georgia, stated, "All our industry wants is for the rules to be enforced and to compete on a level playing field. 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."

Stephen A. Jones, Esq., a partner at the law firm of King & Spalding in Washington, D.C., and lead counsel to the Committee, stated, "We are pleased that Commerce has made an affirmative, preliminary determination in the countervailing duty investigation. The domestic industry has been severely injured by these unfair trade practices, and relief is needed immediately to prevent further business and job losses. In addition to Commerce's findings today, we have alleged subsidies under 14 additional subsidy programs that Commerce is still investigating. We will continue to work hard on this case to ensure that the full measure of unfair subsidies provided to Chinese producers is offset by countervailing duties."

Based on this preliminary determination, Commerce 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. Commerce will then continue its investigation, conduct on-site verifications in China, and make final determinations. In addition, Commerce 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 Commerce'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.