Congressmen Ryan and Johnson Call for Review of Anti-Dumping and Countervailing Duty Cases on Aluminum Extrusions from China

Dec 18, 2014 Issues: Helping Working Families

Washington, D.C. – Congressman Tim Ryan and Congressman Bill Johnson today urged the U.S. Commerce Department urging the Department to “effectively apply the U.S. trade remedy laws and fully enforce the antidumping (“AD”) and countervailing duty (“CVD”) orders on aluminum extrusions from China.” Joining Ryan and Johnson on the letter were Congressmen Pete Sessions (TX-32), Lynn Westmoreland (GA-3), Walter Jones (NC-3), Paul Tonko (NY-20) and Collin Peterson (MN-7), and Congresswomen Ann McLane Kuster (NH-2) and Diane Black (TN-6).                                                      

“Once again we are faced with the prospect of the Chinese taking advantage of American workers by importing aluminum products to the United States that have been subsidized by the Chinese government and once again I stand in opposition to allowing this to happen,” said Congressman Tim Ryan (OH-D). “The U.S. Commerce Department needs to ensure that not one more worker should lose their job or one more factory should close because of unfair Chinese imports.”

“It’s vital that we continue to protect American industries from unfair trade practices – Pennex Aluminum Company in Leetonia is just one of the companies that has been harmed by China’s imbalanced trade policies in the past.  This letter asks the Commerce Department to fully enforce U.S. Trade Remedy Laws to protect hard-working Americans in Eastern Ohio, and across the country, from trade manipulation by Chinese aluminum producers.  I’m proud to have joined Congressman Ryan in authoring this bipartisan letter,” said Congressman Bill Johnson (OH-R).

Aluminum extrusions are extruded metal profiles in nearly every shape and size used in virtually every type of industry in the United States.  Aluminum extrusions are incorporated into everything from computers, cars, appliances, doors, windows, and large scale commercial buildings.

In May 2011, the U.S. government imposed trade orders on Chinese products. However, the relief from this decision is currently at risk due to a number of recent determinations made by the Department of Commerce narrowing the scope of the orders and the Commerce’s continued reliance on the London Metals Exchange (“LME”) benchmark to calculate subsidies. This benchmark does not accurately reflect the actual price to obtain primary aluminum.

America’s aluminum extrusions industry, with $4.6 billion in sales in 2010, employs approximately 30,000 direct workers and hundreds of thousands of indirect workers, all of which benefit the economy of the United States and our communities.  The preservation of these jobs, which are vital to the stability and growth of this industry and important for American manufacturing, are endangered if the unfair trade practices of Chinese aluminum producers are not fully addressed. 

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Text of letter follows:

December 11, 2014

Mr. Paul Piquado
Assistant Secretary for Enforcement and Compliance
U.S. Department of Commerce
14th Street & Constitution Avenue, NW
Washington, DC  20230

Dear Assistant Secretary Piquado: 

On behalf of our constituents in the domestic aluminum extrusions industry, we are writing to encourage the Department of Commerce (“Department”) to effectively apply the U.S. trade remedy laws and fully enforce the antidumping (“AD”) and countervailing duty (“CVD”) orders on aluminum extrusions from China. 

As the Department is aware, it was only a few years ago that the U.S. aluminum extrusions industry was on the verge of collapse. Dumped and subsidized aluminum extrusions from China were surging into the U.S. market at a rapid pace.  At its peak, Chinese producers of aluminum extrusions held 19 percent of what was a $5.4 billion dollar U.S. market, more than any other source of foreign imports combined. This wave of low priced imports crippled domestic production, reduced capacity, and caused mill closures and significant job loss. 

In response, the domestic industry petitioned the U.S. Government for relief under the U.S. trade remedy laws.  The Department properly concluded that Chinese producers were selling their aluminum extrusions in the U.S. market at dumping and subsidy margins of 33 percent and up to 374 percent, respectively.  This dumping and subsidization was found to be injuring U.S. producers and their workers.  As a result, in May 2011, the Department imposed trade orders on these Chinese products. 

Our constituents now inform us that this relief is at risk due to a number of recent determinations made by the Department regarding whether certain aluminum extrusions are covered under the scope of the AD and CVD orders. It is our understanding that the agency is increasingly and inappropriately narrowing the scope of the orders by excluding aluminum extrusions with incidental non-extruded parts from coverage.  This is contrary to the plain language of the scope, which clearly covers all aluminum extrusions whether fabricated and/or incorporated as parts into a subassembly with non-extruded parts.  We are concerned that any interpretation otherwise defeats the very purpose of the orders and threatens renewed harm to the domestic industry and its workers and threatens to allow what should otherwise be a limited exception to become the rule.

We have also been informed that in calculating the subsidy for the provision of primary aluminum for less than adequate remuneration, the Department inappropriately relied on a London Metals Exchange (“LME”) benchmark in its preliminary determination in the current administrative review of the CVD order.  Specifically, we understand that the Department’s regulations require that its benchmark reflect the price that a Chinese company would pay if it purchased primary aluminum on the global market.  However, the LME cash price selected by the Department does not reflect the full “all-in” price a purchaser would pay without the addition of regional premiums to take physical possession of the product. We also understand that the LME cash settlement price is largely based on distorted pricing for Chinese aluminum.  For these reasons, we are concerned that the Department’s continued reliance on an LME benchmark will, contrary to its statutory mandate, prevent the agency from calculating an accurate subsidy margin.

In closing, we appreciate the Department’s attention to these critical issues and are confident that the agency will take our concerns under serious consideration.  Successfully addressing these issues is vital to ensuring the continued health and viability of the domestic aluminum extrusions industry and its workers.

Respectfully submitted,

Congressman Tim Ryan
Congressman Bill Johnson
Congressman Pete Sessions
Congresswoman Diane Black
Congressman Lynn Westmoreland
Congressman Walter Jones
Congressman Paul Tonko
Congressman Collin Peterson
Congresswoman Ann Mclane Kuster