Aug 23

Goetz Fitzpatrick wins major aluminum trade case

Attorneys Donald R. Dinan and Scott D. Simon recently won a major trade case before the U.S. International Trade Commission (ITC) on the importation of aluminum extrusions into the United States from China.

The case concerned whether penalty duties against Chinese imports of extruded aluminum goods should be continued for another five years under both U.S. trade law and World Trade Organization (WTO) rules. In 2012, the U.S. Department of Commerce (DOC) had found Chinese aluminum extrusion manufacturers guilty of dumping (selling at below cost), and receiving illegal Chinese Government export subsidies. The ITC found that the combination of China illegally subsidizing aluminum extrusions coupled with selling below cost, often selling below the coat of the raw aluminum itself, was causing material injury to the U.S. industry resulting in thousands of lost jobs and shuttered factories. The DOC imposed penalty duties on the Chinese imports to offset their selling at less than 1/3 the fair market price.

Goetz Fitzpatrick represented the U.S. aluminum fin evaporator coil (FECs) industry which makes the cooling elements for the U.S. refrigeration manufacturers. The FEC industry had been driven to the edge of extinction by the Chinese predatory practices. Mr. Dinan argued before the ITC that although the industry had returned to health during the period when the penalty duties were in place, which eliminated the unfair trade and predatory pricing, the minute the duties were removed the Chinese would resume their unfair trade practices, sell at below cost, and cause material injury to the industry , most likely destroying it altogether. Already, in the hope that the duties would be removed, the Chinese manufacturers were offering the U.S. refrigeration manufacturers prices up to 50 percent below cost. Mr. Dinan argued that pursuant to U.S. and international trade law, the penalty duties should be continued for another five years.

The ITC ruled in favor of the domestic industry. It found that if the duties were removed, the Chinese would resume dumping and providing illegal subsidies which would have the effect of materially injuring or destroying the U.S. extrusion industry. The industry was defined as including almost all aluminum estrusions ( window frames, shower rods, car components, aircraft parts, etc.). The manufacturers of these other aluminum extrudued goods were also represented in the ITC case. The ITC extended the duties for five additional years. The DOC will continual to imposed duties on Chinese imports for this period of time. The current duty on Chinese aluminum extrusions imports is 86 percent.

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