June 14, 2017

Washington, DC and Wauconda, Illinois -- In a much-anticipated ruling, the Department of Commerce (DOC) announced today that the so-called “aluminum pallets” imported into the United States from the People’s Republic of China (PRC) made of 6xxx-series aluminum alloy are covered by the scope of our orders. This decision will apply to all Chinese exporters and producers that may choose to launch a similar scheme. The Aluminum Extruders Council (AEC) is very pleased with the Department’s decision, and its reasoning for broadening this decision to any importer/exporter of similar fake pallets.

From the DOC’s decision with our emphasis:

“Finally, we agree with the petitioner that the scope ruling should be applied to all extruded aluminum profiles from the PRC consisting of series 6xxx aluminum alloy which are cut-to-length and welded together in the form of a pallet, regardless of producer or exporter. We also note that our analysis above is not contingent on any specific company, but rather, focuses on the description of the product at issue provided by the petitioner. Additionally, information on the record suggests that Zhongwang’s affiliate network is growing, thereby creating the opportunity to evade the Orders. Therefore, we find that all 6xxx series pallets, regardless of producer or exporter from the PRC, are covered by the Orders.”

In early December 2016, the DOC declared that Zhongwang’s so-called pallets are merely aluminum extrusions made of 1xxx alloy, cut-to-length and welded together in the form of a pallet and plainly subject to the existing antidumping and countervailing duty orders on aluminum extrusions from the People’s Republic of China. In March 2017, the AEC asked Commerce to expand its finding to include the 6xxx pallets.

Alan Price, head of the Trade Practice Group at Wiley Rein LLP, stated that, “we are very gratified by the victory today.” He went on to note that, “since the orders have been in place, Chinese producers have engaged in an effort to evade the antidumping and countervailing duty orders on aluminum extrusions. Today’s decision will help to address some of the most egregious evasion.”
As indicated in recent press reports, Customs and Border Protection (CBP) has been investigating whether Zhongwang’s affiliated importers of these pallets intentionally evaded antidumping and countervailing duties by importing these fake pallets. Mr. Price indicated that, “we hope today’s decision aids CBP in its investigation and helps to accurately assess the full amount of duties owed along with any penalties.”

Jeff Henderson, President of the Aluminum Extruders Council stated, “With the DOC’s preliminary ruling identifying heat-treated 5050 alloyed extrusions as a circumvention scheme, and today’s decision addressing the fake pallet issues, the AEC is bolstered in its efforts to work with the Department of Commerce to address all forms of circumvention, transshipment, and scope violations. The Chinese aluminum extrusion industry continues to look for ways to evade our orders. They should learn from this that such efforts will not go unpunished.”

The AEC has led the U.S. aluminum extrusion industry in achieving level competition by winning tariff protection that offsets unfair trade practices of extruders/importers of aluminum profiles produced in China. The efforts have been of enormous value to domestic extruders and suppliers. They may have saved the industry. Conservatively, AEC estimates 800 million pounds per year of extrusions are being produced in the U. S. that would have otherwise been lost to China. For more information, visit Fair Trade.