Boat and component manufacturers that use aluminum alloy sheet metal are likely to see prices rise as early as February after the U.S. International Trade Commission found that imports of the product from China harm American producers.
“I don’t think, on any realistic level, there’s any chance that [the Commerce Department] will not impose duties,” said Jeff Grimson, a lawyer at Mowry & Grimson, during a webinar Tuesday to discuss the case before the ITC.
The National Marine Manufacturers Association expects the duties to increase by about 60 percent, but the rate could be much higher, NMMA spokeswoman Ellen Hopkins told Trade Only Today.
In an “unprecedented move,” the Commerce Department brought an uninitiated anti-dumping and countervailing investigation on common aluminum sheet metal from China, Nicole Vasilaros, vice president of federal and legal affairs for the NMMA, said during the webinar.
Typically those types of investigations are launched after an industry petition or complaint is filed, Vasilaros said.
“The last self-initiated case was almost 30 years ago, so it did catch a lot of people by surprise,” she said.
The investigation will determine whether China is selling the metals to the United States at low prices because Chinese companies are dumping, benefiting from unfair government subsidies or both, said Grimson, who has 20 years of experience in such cases and has been retained by the NMMA.
“The Commerce Department will do those investigations separately,” Grimson said.
The case has been moving rapidly, which is typical, Grimson told about 70 participants in the webinar.
“What’s atypical is it was started by the U.S. government,” Grimson said. “Typically these are triggered by private companies who come to the government for help initiating one of these. In this case it was all done behind closed doors, and out popped the case Nov. 28 and a hearing on Dec. 21, right before the holiday break.”
The NMMA testified at that hearing that U.S. aluminum product mills are operating at capacity, and steeply increasing import duties could result in a supply shortage and an inability to meet demand.
Domestic aluminum sheet makers testified at the Dec. 21 hearing that their jobs number 3,700 in the United States, Grimson said.
“You’ll see in press releases they give bigger numbers, but those relate to the aluminum industry as a whole,” Grimson said. “This is a case of the government proactively choosing one group of American workers over another group, and in our case a much larger group.”
A countervailing duty could come as soon as Feb. 1, and the anti-dumping duty could be implemented as soon as April, Grimson said. The case could wrap up as early as August, but it would probably last an additional three or four months if the agencies take their typical extensions, he said.
“This can be a very disruptive event. These kinds of cases can last for years and years, if not decades, looking at some past cases,” Grimson said.
The NMMA is asking all boatbuilders that use aluminum, as well as component and trailer manufacturers that would be affected, to reach out via boatingunited.com to discuss potential disruption in the supply chain and large tax increases with members of Congress.
The group has also launched “a full-fledged public relations campaign,” Vasilaros said, to make sure the boating industry’s perspective is being heard.
“We know the U.S. aluminum industry is actively telling their story, so they need to hear from us, too,” she said, urging industry stakeholders to write and submit op-eds and post on social media.
Lastly, Vasilaros asked those affected to come to Washington, D.C., in March to talk directly to the administration. She asked that those unable to make the trip in March make a point of attending the American Boating Congress in May.
NMMA president Thom Dammrich said in an op-ed that ran in The Hill on Saturday that the Commerce Department’s self-initiated investigation could threaten 650,000 American jobs that the recreational boating industry supports.
“Like all American manufacturers, we believe wholeheartedly that American businesses and workers should be on a level playing field, and that bad actors should be punished. The administration has indicated they will further examine China and other potential rogue actors that should be taken to task for unfairly manipulating markets,” Dammrich wrote.
“But the government should not be in the business of picking winners and losers. In this instance, by potentially leveling the playing field for U.S. aluminum, which cites 3,700 impacted jobs, Commerce puts ours, and other parts of the American manufacturing industry, at a disadvantage,” he said.
Potentially doubling the price of primary metals used to build boats such as pontoons and fishing boats, the department threatens “to hamstring the recreational boating industry’s economic impact,” Dammrich said.
The NMMA also gave its perspective to Reuters in an article that was widely distributed, Hopkins said. It said the ITC could impose anti-dumping duties ranging from 56.5 percent to 59.7 percent and estimated that about $603.6 million of flat-rolled aluminum was imported from China in 2016.
The NMMA and Grimson urged those affected to reach out to the NMMA and discuss how the increased duties will affect them.
“Regardless of where you’re buying aluminum sheet, these cases tend to disrupt the market and raise costs for all sources,” Grimson said.
“Why should the government be hurting one industry that’s large to potentially benefit another industry that’s small?” Grimson asked. “That’s really the main point here.”