Fair Trade Initiatives to the Rescue

Five years ago, major players within a key segment of the North American aluminum industry came together to defend their markets from an existential threat.  That threat was seen in the surge of extruded aluminum product, much of it anodized, being imported into the U.S. and Canada from China.

What followed is described by some as a “defensive strategy” to protect previously tariff-free and highly competitive markets from the detrimental effects of unfair trade practices, such as government subsidization and predatory under-cost pricing (dumping).  Aluminum extruders and aluminum product manufacturers in the United States and Canada, along with their trade association groups such as the Aluminum Extruders Council and the Curtain Wall Coalition, petitioned their respective governments for protective tariffs to level the playing field.  Those efforts were successful.  As a result, this key segment of the aluminum industry remains safe and intact.  To read more about this strategy, go to: http://aluminumextruderscouncil.blogspot.com.

Note that this surge in imports from China peaked in 2009, just as the North American economy was feeling the brunt of the post-housing-bubble recession.  AEC’s Jeff Henderson writes in his current blog (linked above) that the effect of fair trade initiatives is to have ”delivered over one billion more pounds in aluminum extrusion shipments in 2013 as compared to 2009. This 32% increase in volume has led to extruders investing over seven hundred million US dollars in the past two years.”  That is really the bottom line.  Fairness led to competitiveness.  And that led to more business, more jobs and, one could argue, better products for customers. 

Have aluminum anodizers and other metal finishers benefitted from this?  There is not a lot of hard evidence on this, but common sense indicates the answer is “yes”.  A myriad of consumer and industrial applications were targeted by the Chinese.  Anodized and fabricated extrusions would have been easy targets.  As more orders began pouring into North America, it became easier for custom service offerings using domestic warehouses to deliver just-in-time delivery programs.  With subsidized production, artificially low prices, special delivery systems, and improving quality, the growth in Chinese extrusions had no barrier.  In short, this portion of the domestic aluminum manufacturing industry was in dire peril of being completely outsourced.

Fortunately, due to the foresight and diligence of leading aluminum manufacturers, that didn’t happen.  My trade association, the Aluminum Anodizers Council has remained aware and supportive of efforts to restore and maintain fair trade.  AAC believes global trade is good for competition and consumers, but only when it is conducted freely and fairly.  The Chinese cut corners in attempting to dominate world supply in basic manufacturing industries such as aluminum parts.  When that happens, tariffs can restore a healthy competitive balance.  That is exactly what happened in the aluminum extrusion markets in North America.  Thank goodness. 

This Blog was submitted by:  Rand A. Baldwin, CAE, is the President of the Aluminum Anodizers Council. 

Mr. Baldwin is the chief of staff for the Aluminum Anodizers Council, a not-for-profit trade organization representing the interests of aluminum anodizing firms, suppliers and other members of the aluminum anodizing industry.  For more information, see www.anodizing.org.