Closer look: DOC imposes countervailing, anti-dumping duties on Chinese aluminum extrusions

ITC to follow with its ruling on or before May 12

Editor’s note: This article is compiled from releases posted on the Aluminum Extruders Council Web site,; local news reports; and independent sources. Look for additional articles on the subject in Glass Magazine and on as the story develops further.

On March 29, the Department of Commerce imposed countervailing duties of 8.02 percent and 374.15 percent on aluminum extrusion products from China after determining Chinese extruders had an unfair competitive advantage due to government subsidies. The DOC also imposed anti-dumping duties of between 32.79 percent and 33.28 percent on Chinese aluminum extrusion imports after concluding Chinese companies were selling these products in the United States at below normal prices.

In an investigation that began in the spring of 2010, DOC officials determined that 29 Chinese companies dumped some $500 million worth of extruded aluminum products into the U.S. market last year, according to a March 29 AFP report. The Chinese exported their aluminum extrusions to the United States at roughly 33 percent less than their fair value.

However, the DOC announcement does not guarantee the duties will go into effect. The International Trade Commission will have to determine that the U.S. producers of aluminum extrusions were hurt by Chinese dumping practices. At press time, the ITC trade panel was expected to announce its ruling on or before May 12.

On the same day that the DOC came out with its ruling, U.S. Rep. Pete Visclosky, D-Merrillville, testified before the ITC and said that the impact of aluminum extrusions from China has imperiled the domestic work force and producers, including in northwest Indiana, according to a March 29 report. Between 2007 and 2009, 4,478 jobs in the United States were lost in the aluminum extrusion industry, he said. The 47 lost at Bonnell Aluminum's plant in Kentland were a direct result of a surge in Chinese imports, he said.

The import of Chinese aluminum extrusions has increased considerably in the last few years. From 2007 to 2009, imports increased 90 percent by volume. In 2009, imports of aluminum extrusions were valued at an estimated $514 million, falling slightly to $503 million last year, according to the AFP report.

The investigation

In Spring 2010, the U.S. Aluminum Extrusion Fair Trade Committee filed a petition with the U.S. International Trade Commission and the U.S. Department of Commerce to address alleged unfair trade practices involving aluminum extrusions imported from China, according to a release from the Aluminum Extruders Council, Wauconda, Ill. The departments conducted two investigations: anti-dumping duty, i.e., selling imported product below normal operating cost; and countervailing duty, i.e., having an unfair advantage due to government subsidies to Chinese extruders by their government.

The fair trade committee formed to evaluate the U.S. aluminum extrusion industry and defend it against unfair trade practices from importers, according to the release. It is 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. 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 approximately 2,000 aluminum extrusion workers in the United States.

Canada and Australia also conducted anti-dumping and subsidy investigations against aluminum extrusions from China. On Feb. 16, 2009, the Canada Border Services Agency finalized anti-dumping duty rates at between 1.7 percent and 101 percent, and countervailing duty rates at between $0.38 and $2.42 per kilogram for Chinese aluminum extrusions. On Nov. 6, 2009, Australia imposed provisional anti-dumping duties of 16 percent on some aluminum extrusion products from China. The affected products sold to Australia are priced at about $2,500 a metric ton, and the 16 percent tax increases the price of Chinese products by $400 a ton.

In the DOC’s countervailing duty investigation, none of the three mandatory respondents –China’s Zhongwang Group, Dragonluxe, or Miland –responded to the DOC’s questionnaire. Therefore, by law, the subsidy rates for these companies were determined based on the facts available, according to the AEC release.

When none of the three mandatory respondents participated, DOC selected two voluntary respondents: China’s Guang Ya Aluminum Industries Co. and Zhaoqing New Zhongya Aluminum Co. and its Hong Kong affiliate Zhongya Shaped Aluminum Holding Ltd. Guang Ya and Zhongya responded to questionnaires issued by DOC. The government of China also responded to requests for information.

In the antidumping investigation, DOC selected two mandatory respondents –China’s Guang Ya and Zhaoqing Asia Aluminum Factory Co. – to participate in the investigation. A total of 38 producers and exporters of the subject merchandise—i.e., aluminum extrusions—in China provided quantity and value data, and applied for a separate rate.

In October 2010, DOC issued an affirmative preliminary determination in the anti-dumping duty investigation, and found that imports are being dumped, i.e., sold in the U.S. market at less than fair value, at a margin of 59.31 percent, according to the AEC release. This dumping margin applies to all Chinese exporters of aluminum extrusions.

On Aug. 31, 2010, DOC also made an affirmative preliminary determination in the countervailing duty investigation of aluminum extrusions from China and calculated subsidy rates ranging from 6.18 percent to 137.65 percent of the entered value of the merchandise.

The merchandise covered by this investigation consists of certain aluminum extrusions that are shapes and forms produced via an extrusion process of aluminum alloys. The major alloying elements in the subject merchandise are manganese, magnesium and silicon. These products are generally used in construction applications and are incorporated into window and door frames and sills, gutters and solar power frames. In addition, they serve as parts for cars, trucks, and structural and decorative elements, as well as furniture parts and in a variety of other consumer and industrial goods.

The scope excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry, such as finished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels. The scope also excludes finished goods containing aluminum extrusions that are entered unassembled in a “finished goods kit.” A finished goods kit is understood to mean a packaged combination of parts that contains, at the time of importation, all of the necessary parts to fully assemble a final finished good and requires no further finishing or fabrication, such as cutting or punching, and is assembled ‘as is’ into a finished product.

"The scope of the aluminum extrusions investigation excludes finished merchandise, such as a curtain wall, that contains aluminum extrusions, as long as the product is fully and permanently assembled at the time of entry or is entered unassembled but contains all of the parts necessary to assemble the final finished good,” said Stephen A. Jones, partner and chair of the International Trade practice group at King & Spalding, Washington, D.C., and lead counsel to the Aluminum Extrusions Fair Trade Committee. “In our view, a curtain-wall system would need to contain all of the window glass at the time of entry in order to be excluded. If it did not, it would not be ‘completed,’ or capable of completion, at the time of entry.”