Reclassification an Answer for Fake Chinese Aluminum Semis?

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U.S. trade authorities are considering asking for a reclassification of aluminum products in the wake of China’s exports of aluminum semi-finished products. Architecture billings in the U.S. were still up in July.

Semi-Finished Aluminum

The U.S. is consulting other governments on proposed changes it has drafted to the Harmonized Tariff Schedule (HTS) meant to stop a flood of “fake semi-finished” aluminum products entering the global market, almost always from China, that evade export duties while simultaneously qualifying for Chinese export subsidies.

Two-Month Trial: Metal Buying Outlook

Aluminum industry and Customs and Border Protection sources told World Trade Online the U.S. proposal, still in draft form, would reclassify semi-finished products shipped specifically for remelting as unwrought, or raw aluminum. Semi-finished products are usually an aluminum alloy that are used for further manufacturing, but the fake semi-finished products are almost pure aluminum and cannot be used for any other purpose than remelting.

Charles Johnson, vice president of policy at the Aluminum Association, said a common fake semi-finished product exported from China is labeled for customs purposes as aluminum alloy coils, which are used for airplane wings, auto bodies, roofing and aluminum cans. The coils are sold – among other items – under HTS headers 76.06, which evades China’s 15% export duty imposed on unwrought aluminum and makes the product eligible for export subsidies that start as low as 13%.

Architecture Billings Up Again, Pace of Increase Slows

The Architecture Billings Index was positive in July for the sixth consecutive month, and 10th out of the last 12 months as demand across all project types continued to increase. An economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending.

Free Download: The August 2016 MMI Report

The American Institute of Architects (AIA) reported the July ABI score was 51.5, down from the mark of 52.6 in the previous month. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.5, down from a reading of 58.6 the previous month.

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