U.S. Department of Commerce Levies Preliminary Duties on Foreign Aluminum

In a significant move aimed at shielding the American aluminum industry from international competition, the U.S. Department of Commerce has declared preliminary countervailing duties on aluminum extrusions originating from China, Indonesia, Mexico, and Turkey. The decision, made public on March 5, 2024, in Washington, is seen as a critical step in backing U.S manufacturers and their workforce.

Commerce Department Acts on Unfair Subsidization

In what is perceived as a decisive stance against unfair trade, the Department of Commerce divulged its preliminary findings, asserting that the aforementioned nations are providing injurious subsidies to their aluminum extrusion sectors. According to the information released, imports from China may face heavy duties ranging from 15.41% to a substantial 169.66%. Similarly, Indonesian imports could incur rates between 6.69% to 43.56%. When it comes to Mexico and Turkey, the proposed duties are set at 1.68% to 77.80% and 1.45% to 147.53% respectively.

These remedial measures are advocated by the U.S. Aluminum Extruders Coalition along with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. Both entities, who were the petitioners in the case, applaud the preliminary bid by the Commerce Department, recognizing it as essential to preserving the competitiveness of domestic producers and the protection of their employees.

Preliminary Duties Implementation

The Department’s measures establish the rates of preliminary duties corresponding to the subsidies investigation portion. Subsequent to the preliminary determination’s publication in the Federal Register, expectedly within a week, Commerce will direct the U.S. Customs and Border Protection to initiate the suspension of liquidation process. Consequently, preliminary duties in the form of cash deposits on aluminum extrusions from the named countries will start being collected.

A Probe into Subsidies Is Still Underway

It is essential to note that these determinations are of a preliminary nature. The potential exists for subsidy rates to increase prior to the final determination. The countervailing duty investigations persist, as the Commerce has yet to thoroughly evaluate all the potential subsidies. Furthermore, new allegations regarding subsidy and creditworthiness for several nations could precipitate increased subsidy rates in the final determination. With the final determination anticipated in late July 2024, the timeline could be extended to synchronize with the corresponding antidumping investigations.

Antidumping Duty Investigations Parallel To Countervailing

It is pertinent to understand that the duty rates disclosed pertain solely to the countervailing duty inquiries and do not incorporate the figures from the ongoing antidumping duty investigations. The countries in question, China, Indonesia, Mexico, and Turkey, face additional duties from these investigations, which shall augment the preliminary subsidy rates. The Commerce Department anticipates its preliminary determinations on antidumping duty cases involving the four nations, in addition to 10 other countries, to be disclosed in early May 2024.

Industry Advocates Praise Preliminary Actions

The vigorous implementation of measures by the Commerce Department garnered positive reactions from industry advocates. Robert E. DeFrancesco, a trade counsel to the Petitioners and partner at Wiley Rein LLP’s International Trade Practice, conveyed his affirmation of the actions. He underscored that recognizing the widespread subsidization affirmed foreign governments’ readiness to provide significant unfair aid to bolster their aluminum extrusion exports. It underscores the critical need for the Commerce Department to uphold its efforts in neutralizing these detrimental effects on the domestic aluminum extrusion industry.

Duties to be Imposed on Importers

Emphasis was placed on the fact that upon a conclusive decision, the imposed duties will fall on the merchants bringing the merchandise into the United States. Moreover, the Department of Commerce, along with U.S. Customs and Border Protection, maintains a vigilant watch to prevent any illegal acts, such as duty evasion, absorption, and circumvention.

The Expertise Behind the Petitioners

The representation of the Petitioners by the Wiley team demonstrates their depth of legal expertise in the international trade arena. Led by co-chair Alan H. Price, the team comprises experienced professionals including partner Laura El-Sabaawi, of counsel Adam M. Teslik, associates John Allen Riggins and Kimberly A. Reynolds, and international trade analyst Alex W. Wood.

Availability for Media Contact

For further inquiries, the media can contact several Wiley Rein LLP representatives. Robert E. DeFrancesco, III is available at [email protected] or by phone at 202.719.7473. Inquiries directed towards Laura El-Sabaawi can be made at [email protected] or by phone at 202.719.7042. These contacts stand ready to provide additional details and insights into the trade case at hand.

Conclusion

With these recent actions, the United States signals a firm stance on international trade policy, particularly concerning the safeguarding of its domestic industries against foreign competition perceived as unfair. The industry watches keenly as the outcomes of these preliminary duties are set to evolve, and as we edge closer to a final determination, the landscape of U.S. aluminum production remains in the balance, awaiting the full impact of these significant trade rulings.

For additional information, links to the representatives, and the International Trade Practice of Wiley Rein LLP are available at the following URLs:

Robert E. DeFrancesco: https://www.wiley.law/people-RobertDeFrancesco
International Trade Practice: https://www.wiley.law/practices-InternationalTrade
Alan H. Price: https://www.wiley.law/people-AlanPrice
Laura El-Sabaawi: https://www.wiley.law/people-LauraEl-Sabaawi
Adam M. Teslik: https://www.wiley.law/people-AdamTeslik
John Allen Riggins: https://www.wiley.law/people-JohnAllenRiggins
Kimberly A. Reynolds: https://www.wiley.law/people-KimberlyReynolds
Alex W. Wood: https://www.wiley.law/people-AlexWood

Post-Scriptum

As the world adapts to changes in the international trade ecosystem, the role of legal frameworks and duties becomes ever more critical for maintaining a level playing field. The developments in the case of countervailing duties on aluminum extrusions point to a broader conversation about international cooperation, fair trade practices, and the resilience of national industries. The proactive approach taken by the U.S. Department of Commerce in this regard encapsulates a commitment to the rule of law and fair competition, values that are central to a healthy, functioning global economy.

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