Petitions Filed for Antidumping and Countervailing Duties Against Aluminum Products from 15 Countries

On October 4, 2023, 14 U.S. producers of aluminum extrusion, together with the U.S. Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, filed antidumping duty (ADD) and countervailing duty (CVD) petitions with the Department of Commerce (DoC) and International Trade Commission (ITC). The ADD petitions cover certain aluminum extrusions from 15 countries (i.e., China, Colombia, Dominican Republic, Ecuador, India, Indonesia, Italy, Korea (south), Malaysia, Mexico, Taiwan, Thailand, Turkey, United Arab Emirates and Vietnam) and the CVD petitions cover aluminum extrusions from four of those countries (i.e., China, Indonesia, Mexico and Turkey). 

This is a very large case, with imports of aluminum extrusions from the 15 countries totaling $3.19 billion in 2022. In the same year, the total imports into the U.S. from those countries made up almost 70% of all aluminum extrusions imported. Aluminum extrusions are any aluminum alloys that are forced through a die in order for them to take a specific shape. These can be made to be parts for multiple types of items, ranging from window frames to automobile parts.  

ADD are additional tariffs levied against “dumping,” the act of selling imported goods in the U.S. at “less than fair value.” Fair value is generally the price sold in the foreign product’s domestic market (aside from countries designated “non-market economies,” such as China.) 

CVD are tariffs levied against imports of merchandise that are sold in the U.S. where subsidies have been provided to benefit the foreign production, manufacture or exportation of the goods by a foreign government and the subsidy is deemed “unfair.” Subsidies can come in the form of direct cash payments, credits against taxes and loans at terms that do not reflect market conditions.

The petitions allege dumping margins of:

• 256.58% (China)
• 179.53% (Colombia)
• 66.46% (Ecuador)
• 43.41% (India)
• 112.21% (Indonesia)
• 37.52% (Italy)
• 37.52% (Malaysia)
• 111.38% (Mexico)
• 71.03% (South Korea)
• 116.19% (Taiwan)
• 72.20% (Thailand)
• 33.79% (Turkey)
• 39.80% (United Arab Emirates)
• 53.75% (Vietnam)
• 28.29% (Dominican Republic)

The petitions also claim that significant subsidies exist in China, Indonesia, Mexico and Turkey but did not quantify the net subsidy margins.

Investigating the petitions

For ADD investigations, DoC launches the inquiry to first determine if a reasonable basis exists to support the petitions. If so, ITC makes a preliminary determination as to whether the domestic industry is materially injured (or threatened with material injury) by reason of the alleged dumped imports. If ITC reaches an affirmative preliminary determination, DoC then makes a preliminary determination whether dumping exists and must take place no later than 160 calendar days after the petition is filed. DoC’s decision is important because after the date of an affirmative preliminary determination of dumping (or subsidization), U.S. Customs and Border Protection begins to collect cash deposits of ADD/CVD on all imports falling within the “scope” of the order. (Note: CVD investigations run on a slightly different timetable.)

If DoC reaches a preliminary affirmative determination of dumping, a final determination is required no later than 235 calendar days after the filing of the petition. If DoC reaches a final affirmative determination of dumping, the investigation moves back to ITC for a final determination of injury or threat of material injury, which must be concluded no later than 280 days after the date the petition is filed. If ITC finally determines that dumped imports materially injure (or threaten material injury) to the domestic industry producing the “like product,” DoC will issue an ADD order within seven days of ITC’s final determination(s). (Note: some of these deadlines may be extended upon approval by DoC or ITC.)

The full timelines for ADD/CVD investigations are set forth below:

Source: Statutory Time Frame for AD/CVD Investigations (trade.gov)

Importers should also be aware that subject merchandise entries made after the initiation of an ADD/CVD investigation may retroactively be subject to the duties. The petitioner in an investigation may allege critical circumstances up to 21 days before the date of DoC’s final determination. If DoC determines that such circumstances exist, it can order the retroactive suspension of liquidation and posting of a cash deposit for entries made before a determination is issued. This can apply to entries made 90 days before the effective date a suspension of liquidation was first ordered or the date the determination to initiate the investigation is published in the Federal Register. Regardless, cash deposits are a fact of life when importing goods subject to ADD/CVD orders and importers have limited options to avoid paying them. 

Finally, the scope of the proposed ADD and CVD in the present case covers aluminum extrusions regardless of form, finishing or fabrication, whether assembled with other parts or unassembled, whether coated, painted, anodized or thermally improved. The proposed scope significantly broadens the previous ADD and CVD orders against China in the antidumping case (A-570-967/C-570-968). In fact, the petitions request that products DoC previously determined to be excluded from the original China ADD/CVD orders now be subject to the new ADD/CVD scope language proposed in the petitions. Given how aluminum extrusions often substitute for components and subassemblies used in larger finished products, the potentially applicability of the proposed orders could cover items ranging from components to solar panels and motor vehicles to door parts.    

As noted above, the scope of the ADD/CVD orders describes the merchandise covered by the orders. (Note: the tariff codes are not dispositive; while DoC lists tariff codes that are potentially covered, only the language of the scope of the ADD/CVD investigation conclusively determines the applicability of the cash deposits. The proposed scope identifies a number aluminum-related tariff classifications in Chapter 76 of the Harmonized Tariff Schedule of the United States (HTSUS), but also includes many other non-aluminum-specific tariff classifications in Chapters 83, 84, 85, 86, 87, 88, 90, 94, 95 and 96.) The ADD/CVD orders set forth include the final “scope” of the order, the final ADD/CVD margins and continued cash deposit rates for the specific producers/exporters reviewed, as well as the “all others” rate applicable to all other companies not participating in the ADD/CVD investigations.

How BDO can help

Companies importing products from any country that contains aluminum should consider taking immediate steps to determine whether their products fall within the potential scope of this new investigation. 

BDO’s customs and international trade team can assist companies in carrying out risk assessments to determine whether their products potentially fall within the scope of any ADD or CVD orders and submit comments to the DoC and ITC and help ascertain what mitigation steps can be taken.