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US, China clash over aluminum foil duties

February 28, 2018

The US Commerce Department has upheld tariffs imposed on imports of Chinese aluminum foil, after concluding that the country’s producers are receiving unfair subsidies and dumping the product in the American market.

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Aluminium Aluminiumrollenlager
Image: Imago/Pan-Images/Nordmann

The US Commerce Department announced on Tuesday that it maintained duties ranging from 49 percent to 106 percent imposed on Chinese aluminum foil last year. The agency said its investigators had reached preliminary findings in August and in October that Chinese exporters were dumping aluminum foil, worth an estimated $389 million (€318 million) in 2016, on the US market, helped by state subsidies of more than 80 percent.

Commerce Secretary Wilbur Ross claimed the decision was the result of a "transparent process with a thorough and unbiased review of the facts."

"This administration is committed to trade that is fair and reciprocal, and we will not allow American workers and businesses to be harmed by unfair imports," Ross said in a statement.

The ruling is likely to add to tensions between Washington and Beijing, which has rejected claims that it gives its aluminum producers an unfair advantage.

Looming trade war

China has warned that Washington risks undermining vital trade relations by threatening to impose tariffs on its exports. The Chinese Commerce Ministry on Wednesday voiced "strong discontent" over the action on aluminum foil.

Let the tariffs begin!

Senior ministry official Wang Hejun said in a statement that the "unreasonable overuse of trade remedy measures by the US side" would fail to revive the country's aluminum foil industry, affect jobs in the United States and hurt consumers there.

"Regarding the wrong practices of the United States, China will take necessary measures to safeguard its own legitimate rights and interests," Wang added.

Read more: Germany's DIHK warns new US tariffs could trigger trade war

The decision comes the same week that top Chinese adviser, Liu He, is expected in Washington for discussions over the two nations' trading and economic relationship. The White House is also preparing retaliatory measures against high imports of aluminum and steel from China, the European Union and other countries, claiming they undermined US national security.

Read more: EU mulls retaliation if US slaps import tariffs on steel

Competition issues

US imports of aluminum foil from China were an estimated $389 million in 2016. American producers have been exerting pressure for protections over what they say is unfair foreign competition.

Beatriz Landa, vice president at Novelis, which makes aluminum products, has claimed a surge in cheap Chinese imports from 2006 "decimated" prices for foil in the US. "We cannot continue to reduce prices on our product offerings and remain sustainable," Landa said at an ITC hearing on the case in Washington this month.

At the same hearing, a spokeswoman for the Chinese metals industry, Xinda Mo, said the aluminum market in both countries has been shaped by independent investment decisions by companies, market demand and shifts in supply dynamics.

The issue now goes before the US International Trade Commission, which is expected to have the final say on the injury claims in a vote scheduled for March 15. Under the Trump administration, the Commerce Department has launched 102 trade cases against dumping and unfair subsidies, nearly doubling the number of actions brought by the previous US government.

uhe/aos (Reuters, dpa, AFP)