Volume 45, Issue 11 - November 2010

feature

Trump Card?
Donald Trump Places Large Window Order; But Says He Couldn’t Find Them in the United States
by Ellen Rogers

Donald Trump recently placed a large window order from an unknown Chinese window producer for one of his projects, according to an interview with CNBC. Why? He says he couldn’t find a U.S. producer.

“I ordered windows, thousands of windows the other day; they’re made in China,” he told CNBC in the September 10 interview. “I don’t want to buy them, but it’s hard to get them anywhere else.”

Not surprisingly, Trump’s offhand comment drew a great deal of attention from U.S.-based commercial window manufacturers.

Buy American?
U.S. manufacturers were quick to disagree on the real estate mogul’s assessment of the availability of domestic windows, pointing out that U.S. manufacturers offer high-quality custom products—and are seeking work. In a recent interview with USGlass on ensuring quality in imported aluminum materials, Dave Hewitt, director of marketing for EFCO, a Pella Co., in Monett, Mo., points out, “There are a lot of hard-working people [in the aluminum window/curtainwall industry] in the United States who need work and we have a lot of capacity, which makes us competitive.”

“We did not have the opportunity to review the specifications for Mr. Trump’s recent large Chinese window purchase. However, I find it impossible to believe that American manufacturers could not have produced equal products better, quicker and more cost effectively,” Ray VanNess, president of Shreveport, La.-based Seal Craft, tells USGlass. “I have grown weary of this kind of news while having to lay-off good employees while struggling to outlast this recession. Buy American!”

Tom Harris, executive vice president of United States Aluminum in Waxahachie, Texas, had a similar take. “All suppliers I know are desperate and have seen the dip coming for a while, so I believe they would have pursued aggressively,” he says.

“What is so special about these windows?” asks Ted Wantuck with Statre Corp. in Rochester Hills, Mich. “Having represented window manufacturers for years and being aware of the great variety of window manufacturers in this country, I am skeptical about the inability of Mr. Trump to find his product in the United States.”

Courtney N. Little, president and general counsel of Ace Glass in Little Rock, Ark., says perhaps it comes back to the industry needing to do more to educate potential buyers.

“Maybe the truth is that we are not doing enough as an industry to promote all that we have to offer. Maybe Trump doesn’t know that you can’t throw a rock in Wisconsin without hitting a window company. We need to make sure that we do our part to educate potential buyers that we have the products they need.”

Buying from China
According to U.S. Census Bureau figures, yes, Chinese imports of aluminum and bauxite products have increased in recent years. Reports show that such imports were valued at $464,188,000 in 2005; in 2009 the value was reported as $599, 932, 000 (down some compared to 2008, which was listed as $617, 672, 000).

Just recently the U.S. Department of Commerce ruled that aluminum extrusions imported from China are benefiting from various subsidies that are countervailable under the law. Based on the preliminary determination, imports of aluminum extrusions from China will be subject to cash deposits or bonds ranging from 6.18 percent to 137.65 percent of the entered value of the merchandise (see “Department of Commerce Finds Chinese Aluminum Extrusion Imports are Being Subsidized Significantly” at right).

“Mr. Trump’s purchase of ‘thousands of windows’ in China because they were cheaper than those made in the U.S. shows that Chinese manufacturers have already found a loophole around the anti-dumping tariff on aluminum extrusions whose ink is hardly dry,” comments Bob Pecorella of Northern Building Products in Teterboro, N.J. “Instead of shipping just aluminum lineals, where post-tariff prices would be more comparable to those of U.S. manufacturers, the Chinese are doing the entire assembly process to circumvent the intent of the U.S. International Trade Commission.

“Ironically, Mr. Trump may have done us a favor by bringing this issue up so that the industry can push for appropriate protective action,” Pecorella adds.

Chuck Knickerbocker, curtainwall manager with Technical Glass Products in Snoqualmie, Wash., wonders if Trump is only telling part of the story, noting there are possibly several scenarios in play.

“One, he couldn’t find a U.S. producer who would do it as cheaply as the Chinese were willing to do it. Two, he wasn’t willing to pay for the quality he’ll get in a U.S. product over the money he thinks he’s saving in buying from the Chinese. And three, in the long run, he’ll pay for it through the nose, as he has no guarantees that he’ll get anything close to the warranty coverage he’d get if it were from a U.S. manufacturer. Also the Chinese, as of this date, won’t provide the quality of goods and services he’d get with a U.S. manufacturer. Granted, it’s changing, but it is not there yet. The Chinese have not been doing it that long and don’t have the depth and breadth of experience the U.S. manufacturers have.”

Knickerbocker adds, “Like all things, you get what you paid for. In the end, you’re probably getting top-end, Class A prices while providing a Class C space and amenities.”

Trump Responds
The glass industry reaction on this comment was so strong, in fact, that it brought forth a reaction from Trump himself. On October 4, USGlass received a copy of our report with a handwritten note, confirmed to be from Trump, saying, “China’s artificially low currency make it hard for U.S. companies to compete—I would much rather buy ‘U.S.’—and do much business with Pella—(and others). The U.S. product is better.” 

Still, that note did not come with a confirmation that Trump would be looking at the available products produced in the United States.

Ellen Rogers is a contributing editor for USGlass.


Department of Commerce Finds Chinese Aluminum Extrusion Imports are Being Subsidized Significantly

The U.S. Department of Commerce (DOC) has announced its affirmative, preliminary determination that imports from China are benefiting from various subsidies that are countervailable under the law.

The determination follows the filing of a petition earlier this year from the U.S. Aluminum Extrusion Fair Trade Committee, a coalition of U.S. extruders, with the U.S. International Trade Commission (ITC) and the U.S. Department of Commerce (DOC) for redress from alleged unfair trade practices involving aluminum extrusions imported from China. As a result of this decision, countervailing duties may be applied to imports to offset these subsidies and remedy the unfair trade. Based on this preliminary determination, imports of aluminum extrusions from China will be subject to cash deposits or bonds ranging from 6.18 percent to 137.65 percent of the entered value of the merchandise. If the case ultimately is successful and a countervailing duty order is imposed, imports after this preliminary determination will be subject to countervailing duties. Likewise, importers also could be liable for countervailing duties on imports of aluminum extrusions from China.

Brent Slaton is the national sales coordinator for Keymark Corp., an aluminum extrusion company, and is also actively involved with the American Architectural Manufacturers Association’s Aluminum Material Council. He says the U.S. available aluminum capacity currently is running at about 60 percent.

“It’s a 3 billion pound market a year,” Slaton says. “Last year China exported extrusions of 192,000 tons into the United States.
That equates to close to 500 million pounds.”

With the DOC’s recent determination, the bonds on exports coming into the United States can be viewed as a positive step forward. Slaton points out that in the United States building construction materials make up the largest portion of those 3 billion pounds and about 1.3 billion of that is estimated to be doors, windows and curtainwall.

“With this change in effect, domestic producers won’t have to compete with subsidized metal and it will allow them to be more price competitive and profitable,” Slaton says. “It will also help create jobs and some of the presses that have been idle will hopefully start back up.”

“All our industry wants is for the rules to be enforced and to compete on a level playing field,” adds Duncan Crowdis, chairman of the committee and president of Bonnell Aluminum. “The Commerce Department’s preliminary determination shows the extent to which the Chinese industry is receiving unfair government subsidies. U.S. producers cannot compete under these unfair conditions, and we need Commerce to apply duties to ensure that additional business and jobs are not lost due to unfair competition.”

Rand Baldwin, president of the Aluminum Extruders Council (AEC) agrees, “The determination by the Commerce Department is a welcome leveling of the playing field. It will benefit our entire industry and all our customers. Bringing a fair trade case is always a risk. AEC salutes the U.S. Fair Trade Committee. This preliminary order vindicates, in a big way, the risk taken by the Committee. It also lends evidence to just how difficult an environment it had been for U.S. extruders.”

Based on this preliminary determination, the DOC will instruct Customs to suspend liquidation of imports of aluminum extrusions, and importers will be required to post a bond or deposit cash in the amount of the estimated duties. The DOC will continue its investigation, conduct on-site verifications in China, and make final determinations.

In a separate investigation, the DOC is investigating whether imports are being sold at prices that are less than fair value (i.e., dumped). Following Commerce’s preliminary determinations, the U.S. International Trade Commission will conduct a final investigation and determine whether the industry is injured or threatened with injury. If the DOC’s and the ITC’s final determinations both are affirmative, antidumping and countervailing duty orders will be imposed, and imports will be subject to antidumping and countervailing duties. The anticipated timing of the impositions of antidumping and countervailing duty orders is spring 2011.


 


USG
© Copyright 2010 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.