Volume 48, Issue 11- November 2013

NewsNow

Chinese Curtainwall Manufacturers Look
for Alternative Tariff-Free Entry into U.S.

While many domestic manufacturers of curtainwall may have relaxed since the U.S. Department of Commerce’s decision in November 2012 to subject imports of unitized Chinese curtainwall to a tariff (see January 2013 USGlass, page 14), they still face overseas competition.

“There is a slowdown in Chinese product,” says Nick Bagatelos, president of Bagatelos Architectural Glass in Sacramento, Calif. The contract glazier is one member of the Northern California Glass Management Association (NCGMA), which also has been active in this case. Bagatelos adds, “The owners understand that the benefit is not worth the risk.”

That, however, evidently, doesn’t mean overseas manufacturers aren’t still trying to ship their product stateside without paying the tariff.

“In all trade remedy cases, including this one, importers try to ship the product through a third country,” says David M. Spooner with the Washington, D.C., office of the law firm of Squire Sanders. “Either it’s outright fraud, where they’re taking curtainwall through another country and taking it out of the Chinese boxes and putting it in [boxes reading] ‘Made in Malaysia’ instead or maybe doing some minor processing in a third country such as Mexico and saying it’s ‘Made in Mexico’ when, in truth, not enough processing was done to make it ‘Made in Mexico.’”

Bagatelos points out that since this method of avoiding tariffs has been done before, customs officials are on the lookout. “They are trying to ship through other countries, but the U.S. customs officials are aware of their attempt to circumvent U.S. law, and are following up with criminal prosecutions as this occurs,” Bagatelos says.

In addition, several companies are taking a more direct route around the tariff—an appeal to the Commerce Department.

“A group of Chinese manufacturers and importers, primarily a company called Yuanda, challenged Commerce’s decision at the Court of International Trade (CIT),” Spooner explains. “The court hearing was [September 25] at the CIT in New York before Judge Eaton. No decision yet, but we had the hearing.”

Spooner says it’s possible that it will take up to several months before the judge hands down a decision.

According to Bagatelos, “…The U.S. government seems to be siding with the NCGMA.”

Not necessarily so, according to John D’Amario, Northwest USA sales manager for Yuanda USA Corp. in Alameda, Calif.

“We believe the court (in this case) will realize how silly Commerce’s scope decision was and that a remand will be issued,” he says. “Regardless of the outcome, Chinese curtainwall firms already have alternative plans to ensure that their supply of fabricated curtainwall modules to the USA will proceed with little or no interruptions, which is funny when you consider how much time and money protectionists, such as the Curtain Wall Coalition, continue to spend fighting it. It’s like trying to put water in a bucket that has holes in it,” he adds.

In the meantime, Spooner cautions importers to be wary of the ways in which product is coming to this country.

“Folks really should be careful, and I’m not saying this only as an advocate for the domestic manufacturers. It’s important to remember that under U.S. law there’s a presumption that the importer of record is liable for anything that’s gone wrong, and so folks have to be a little careful when they are importer of record not to just buy the assurances of their suppliers,” he says. Spooner adds, “While often the importer of record is on the hook, it’s not a hard and fast rule.”

“The Antidumping Duty (AD) and Countervailing Duty (CCVD) Orders on Curtain Wall Units and Other Parts of a Curtain Wall System from the People’s Republic of China (PRC)” stemmed in part from the efforts of three glazing contractors, Architectural Glass & Aluminum, Bagatelos Architectural Glass and Walters & Wolf AGA, collectively known as the Curtain Wall Coalition. In August 2012 the group approached Spooner’s firm with the task of clarifying whether curtainwall units were included in the Commerce Department’s ruling on anti-dumping and countervailing duties on Chinese imports, and therefore subject to the tariffs. Spooner’s investigation found that importers were not collecting tariffs on imports of aluminum in curtainwall units and the three companies together filed a scope petition. In November 2012, the department ruled in favor of the domestic glazing contractors. Since then, there has reportedly been a noticeable difference in the amount of Chinese product being installed.
—Megan Headley

 


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