1. Industry Update: Aluminum Trade Practices
Nicole
January 16, 2018

2. Presenters
T. Nicole Vasilaros, Esq. Vice President, Federal and Legal Affairs National Marine Manufacturers Association Kristin Mowry Jeff Grimson
Nicole
Specialists in unfair trade cases/import compliance matters affecting U.S. end users/manufacturers
Representative Clients:
National Association of Home Builders, Flexible Packaging Association, Kitchen Cabinet Manufacturers Association, International Wood Products Association, American Home Furnishings Alliance, Retail Industry Leaders Association
Target, Home Depot, Ashley Furniture, Fortune Brands

3. Tariff Act of 1930
Allows for the investigation by the U.S. Department of Commerce and U.S. International Trade Commission (ITC) to assess unfair trade practices
Criteria:
1. Is the import being sold at less than “fair value” and/or
2. Does the import benefit from illegal foreign government subsidies
ITC examines whether imports are having a negative impact on the domestic industry
Can lead to steep duties and market disruption
Nicole

4. Background
On November 28, 2017, Secretary of Commerce Wilbur Ross announced the “self-initiation” of an unfair trade case against Common Alloy Aluminum Sheet from China
“Self-initiation” means the case was not started after the filing of a complaint by a domestic industry
Very rare (last ones were almost 30 years ago)
1xxx, 3xxx, 5xxx aluminum sheet
Nicole

5. International Trade Commission
Quasi-judicial commission
6 Commissioners typically (currently at 4)
Determination: Is there injury to domestic producers?
Up or down vote
Jeff/Kristin

6. Department of Commerce
Executive branch agency
Measures the level of dumping or subsidization by exporters
Conducts independent investigations of dumping and countervailing duty
Jeff/Kristin

7. What is “dumping” and “countervailing”?
Dumping = Less than fair market value as compared to sales price in home market or constructed value
Countervailing = a government financial contribution that confers a benefit to a specific industry or enterprise
Ex: grants, loans, equity infusions, tax credits
Jeff/Kristin

8. NMMA engagement timeline
November 28, 2017 – Announcement of AD/CVD investigation
December 2017– researched Department of Commerce actions and assess recreational marine industry vulnerability
Approval from NMMA executive committee to retain specialized outside counsel
Coalition formed (RVs, trailers)
December 21, 2017: testified at ITC preliminary hearing
December 27, 2017: submitted brief for record
January 12, 2018: preliminary ITC vote
Nicole

9. Aluminum Boating Statistics
Aluminum sheet is used for pontoon boats, engines, components, trailers, etc.
Growing segment of American boatbuilding: $3 Billion
8,000 direct jobs
111,000 aluminum powerboats sold in 2016– average length 19 feet, 43% market
Pontoon Boats: 35,000 units sold, 14% market
Boat Trailers: 205,000 units, $351 million in sales
Nicole

10. Marine Arguments
Domestic industry is not injured by imports of Chinese aluminum
Volume of imports are not displacing domestic production
Pricing of imports has not caused US pricing collapse
Competitive pricing across other import sources and significant presence of suppliers from Korea and Greece
Marine industry requires wide sheet aluminum not readily available by US producers (72in +)
US mills at or near capacity and can’t meet demand
Jeff/Kristin

11. Impact on Marine Industry
Import duties could disrupt supply and raise costs for aluminum sheet from all sources
Duties could kick in as early as February 1
Commerce Department’s own initial projections show duties of at least 60 percent
Jeff/Kristin

12. US Jobs at Stake Will Harm More U.S. Jobs than it Helps!
Direct Marine Manufacturing Jobs: 8,000
Direct and Other Boating Manufacturing Jobs: 12,000
Related Dealer Jobs: 10,000+
Jobs in RV, trailer and other industries: tens of thousands
Domestic aluminum sheet makers: 3,700 workers
Commerce Department’s “self initiation” is choosing one group of American workers over another (larger) group.
Jeff/Kristin

13. ITC Preliminary Determination
January 12, 2018: 4-0 to continue the investigation
Jeff/Kristin

14. FASTEST ESTIMATED TIMELINE
Case Timeline (Fast)
FASTEST ESTIMATED TIMELINE
CVD Timeline
AD Timeline
DOC Initiates
11/28/2017
ITC Vote
1/12/2018
DOC Preliminary Determination
2/1/2018
4/20/2018
DOC Final Affirmative Determination
4/17/2018
7/4/2018
ITC Final Hearing (predicted)
DOC Issues Order (assumes NO alignment with AD)
6/8/2018
8/25/2018
Jeff/Kristin
Note: These dates are projections only. Members should consult legal counsel before relying on the above dates for business decisions

15. Potential Results ITC votes no injury = case is terminated
ITC finds injury (whether preliminary or final) = case proceeds
DOC sets duty levels and will change them
Duties can be retroactive
The mere filing of this case is expected to have a disruptive impact on the market for all consumers of aluminum sheet
Jeff/Kristin

16. Next Steps
Encourage all affected companies to engage in the legal fight
Consider testifying at the ITC’s final hearing. Key topics: inability to source adequate volumes or required specifications from domestic industry, potential substitute products (if any) or supplying countries, etc.
Let NMMA know how this case is affecting you. Sometimes small impacts can be the tip of the iceberg that our legal counsel needs to understand.
Jeff/Kristin

17. How can you help?
Contact your member of Congress today! At boatingunited.com
Engage in NMMA’s public relations campaign– Op-Eds, Letters to the Editor, Social Media help to get our US jobs story front and center
Join us in Washington for meetings with officials on Capitol Hill and in the Administration– March 2018
Join us in Washington for the American Boating Congress– May 2017
Nicole

18. Please contact: Nicole Vasilaros @ nvasilaros@nmma.org 202-737-9763
Questions?
Please contact: Nicole