Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our International Trade newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (April 15, 2020, 5:57 PM EDT) --
 |
| Mark Ludwikowski |
This new round follows an earlier common alloy aluminum sheet anti-dumping/countervailing duty investigation against China, which was self-initiated by the U.S. Department of Commerce in November 2017. That investigation resulted in the publication of anti-dumping/countervailing duty orders with margins ranging from 49.85% to 59.72% — anti-dumping — and 46.48% to 116.49% — countervailing duty.[1]
Since March 8, 2018, imports of common alloy aluminum sheet have already been subject to 10% tariffs, imposed as a result of a national security investigation under Section 232 of the Trade Expansion Act of 1962.
This sweeping action consists of anti-dumping petitions on imports from Bahrain, Brazil, Croatia, Egypt, Greece, Germany, India, Indonesia, Italy, South Korea, Oman, Romania, Serbia, Slovenia, South Africa, Spain, Taiwan and Turkey, and countervailing duty petitions on imports from Bahrain, Brazil, India and Turkey.
The industry petitioners are the Aluminum Association's Common Alloy Aluminum Sheet Trade Enforcement Working Group and its individual members, Aleris Rolled Products Inc., Arconic Inc., Constellium Rolled Products Ravenswood LLC, JW Aluminum Company, Novelis Corporation and Texarkana Aluminum Inc.
Interestingly, in the earlier case against China, the Commerce Department obtained much of the information for its self-initiated investigation through collaboration with these same petitioners. Hence, it is likely that a good amount of the heavy lifting needed to prepare the numerous new petitions was already done by the industry.
The scope of these cases is the same as that in the China investigation, and covers common alloy sheet with a thickness of 6.3 mm or less, but greater than 0.2 mm, in coils or cut-to-length, regardless of width.
Common aluminum alloy sheet is used by a wide range of downstream industries where its strength, relatively light weight, formability and corrosion resistance are required. These industries include: transportation (truck trailers, passenger cars and light trucks, and trucks and buses), building and construction (siding, gutters, downspouts, curtail wall and roofing); infrastructure (signs and license plate stock); and electrical and marine applications.
These cases come at a precarious time for the U.S. industry and for global suppliers. The COVID-19 pandemic has disrupted production, logistics and supply chains. Against this backdrop, the petitioners have claimed that despite the brief uptick in the industry's performance following the China orders, contract negotiations in late 2019 yielded significantly lower net prices for sales in 2020. In addition, imports from the 18 subject countries increased significantly and accounted for nearly 70% of all common aluminum alloy sheet imports in 2019.
During the U.S. International Trade Commission's preliminary phase proceeding, foreign suppliers argued that the U.S. market has witnessed a significant shortfall in the ability of domestic producers to satisfy demand for common aluminum alloy sheet, which foreign suppliers have sought to meet.
This, they claimed, is evidenced by the petitioners' requests for nearly a thousand exclusions from Section 232 tariffs. The respondents have also pointed to the anti-dumping/countervailing duty order on Chinese common aluminum alloy sheet, which increased demand and inability of many consumers to source these products.
This case also introduced the COVID-19 pandemic into the ITC's injury analysis. The commission asked questions on this subject: How have the global developments in 2020 impacted the markets for common aluminum alloy sheet? Do long-term contracts insulate market participants from these effects?
The petitioners' overall response has been that the inevitable decrease in demand will only exacerbate the impact of the low-priced import inventories that are currently sitting in the market. They also noted that as the economy continues to suffer from the impact of the pandemic, U.S. producers anticipate the downstream sectors on which demand for common aluminum alloy sheet depends similarly will suffer, and that even customers with long-term contracts will purchase significantly less volume of common aluminum alloy sheet.
The COVID-19 pandemic has created some unique administrative hurdles for these proceedings. Both the Commerce Department and the ITC are fully operational, While they have instituted some adjustments while staff is forced to telework, they are continuing to follow their statutory deadlines.
Both agencies are only accepting electronic filings until further notice. Each has also amended its rules concerning public hearings and service of confidential and public documents by counsel, to allow for electronic service on parties to proceedings.
Despite these accommodations, respondents' and petitioners' counsel still face challenges in converting voluminous filings (which previously could be delivered in person, on a CD-ROM or as a hard copy) into readable text and uploading them onto agency dockets that have file size limitations.
Especially difficult during this time of travel restrictions and mandatory quarantine periods is counsel's ability to obtain information from clients in order to respond to the agencies' questionnaires.
Travelers from certain countries are subject to mandatory quarantine periods when leaving home and returning. This completely forecloses the ability to meet and advise foreign clients in person. While it is not impossible to review relevant documents and financial records by telephone, email or online, it is extremely difficult and time consuming to do so, particularly in different languages. It is also difficult to translate and prepare the documents in time for filing deadlines.
Considering these challenges, the agencies have been generous in granting extensions for filing deadlines. In the new aluminum sheet cases, the ITC preliminary injury vote on whether imports are injuring the domestic industry is scheduled for April 22.
If the ITC finds injury, the cases will move to the Commerce Department, which will calculate the preliminary countervailing duty and anti-dumping margins currently scheduled for June 3 and Aug. 17, respectively. The preliminary determination dates are also when importers would be required to deposit calculated duties upon the products' entry into the U.S. market.
Given the short procedural deadlines, made even more challenging by the pandemic, companies should prepare to navigate through some uncharted administrative territory in the coming months.
What this means in practice is that companies that need to respond to the agencies' requests should start on their responses as soon as practicable, and allow themselves additional time. Extension requests may also be necessary.
Counsel should also consider that service and access to confidential information has changed. Service is now made electronically through the agencies' online dockets rather than served manually. Also, public hearings are being held telephonically. Finally, the trade community is encouraged to stay abreast of agency policies as they evolve in response to the pandemic.
The Customs and International Trade Bar Association is working to arrange a webinar panel in the coming weeks with officials from Commerce, ITC and U.S. Customs and Border Protection to discuss how the agencies are handling the remote work arrangements. Should the webinar be scheduled, details will be made available on the CITBA website.[2]
Mark R. Ludwikowski is a member and leads the international trade practice at Clark Hill PLC.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firms, their clients, or any of its or their respective affiliates. This article is for purposes of general information and is not intended to be and should not be taken as legal advice.
[1] See Common Alloy Aluminum Sheet From the People's Republic of China: Antidumping Duty Order, 84 Fed. Reg. 2,813 (Dep't Commerce Feb. 8, 2019); Common Alloy Aluminum Sheet From the People's Republic of China Countervailing Duty Order (Dep't Commerce Feb. 6, 2019).
[2] Customs and International Trade Bar Association at https://citba.org/events/.
For a reprint of this article, please contact reprints@law360.com.
