Fair Trade - August 2013

Business Is Good...That Didn't Happen By Accident

Four short years ago, the aluminum extrusion business in North America was, well, awful.  The recession had ravaged demand, the construction market had disappeared and imports from China were threatening to swamp any recovery before it could get started.  Some businesses - extruders and suppliers alike - were weathering the storm. Others were barely hanging on.

Today, demand for extrusions in North America is strong. Virtually all markets have improved and new applications in automotive, renewable energy and lighting, as well as an improving B&C market bode well for extruders and suppliers. Crucial to this turnaround has been the success of AEC-led industry efforts to level the playing field via tariffs on Chinese imports so that domestic extruders could win back customers that had moved offshore due to subsidized pricing.

Natural market forces and a compelling business case of aluminum extrusion helped fuel this remarkable improvement.  The demand was bound to come back.  But the fact that Canadian and U.S. extruders were positioned to benefit, instead of having this business go to China, was no accident. It took vision, resolve and a serious commitment of resources to maintain the fair trade needed to save our markets. You - and others like you - willed this to happen.

Related:

Whitehall Industries gets visit from Michigan Congressman Huizenga

Michigan Governor Rick Snyder talks manufacturing with Postle Extrusion

Funny thing about success, though. It breeds complacency. For the first time in the six years of the Fair Trade initiative for AEC, there exists a dangerous lack of urgency. The existential threat to its North American markets that this industry barely avoided is as treacherous as ever. Achieving fair trade came at a price. Maintaining fair trade is just as dear and just as important.

China's domestic markets are soft and their capacity and interest in supplying North American customers - as well as their intent to subsidize producers to keep prices artificially low - is still evident.  The Canadian tariffs are up for a full review. Legal challenges and requests for waivers from the U.S. tariffs are actually increasing in frequency.  What's more, the U.S. Department of Commerce has become far more lenient in granting waivers.

The latter development is a departure from the intent of the Fair Trade petition which was won almost three years ago. Six U.S. extruders, plus AEC staff, went to Washington DC recently to argue the point. The delegation included Rick Merluzzi of Metal Exchange, Duncan Crowdis of Bonnell Aluminum, Jeff Henderson of Sapa Extrusions, Rob Swartz of Kaiser Aluminum, Charles McEvoy and Bennett McEvoy of Western Extrusions, Rand Baldwin, AEC President, and representatives from the AEC's Fair Trade attorneys, Wiley Rein. In addition to a productive meeting at USDOC, the delegation met with staff of nearly two dozen Senators and Representatives. The purpose of all this effort was to ask for help from Congress to pressure the Department to return to the original intent of the orders.

Dozens of extruded aluminum markets, and millions of pounds of extrusions, have been rescued for domestic extruders by efforts such as these. But the fight is ongoing, in fact it's intensifying. To keep going, AEC will need the support of every U.S. extruder and suppliers too. Get involved. Find out how you can help AEC to help you. If you can't afford the time, please give a financial contribution. Free markets are worth defending: the cost is low and the reward is great.