America’s Department of Commerce has concluded that Chinese exporters are selling aluminum foil in the US at “48.64 to 106.09 percent less than fair value.” The department also alleges that China “is providing unfair subsidies to its producers of aluminum foil at rates of 17.17 to 80.97 percent.”
China is threatening to retaliate. Wang Hejun, chief of the Trade Remedy and Investigation Bureau at the Ministry of Commerce, said the country will take all measures necessary to protect its legal rights and interests.
“The U.S. has disregarded the WTO rules and seriously damaged the interests of China's aluminium foil exporters,” Wang said in a statement. “China is strongly dissatisfied with this."
The ball is now with the US International Trade Commission, which will decide whether the Department of Commerce is correct in its determination. The ITC will announce its ruling on March 15.
Anti-dumping and countervailing duties
According to the Department of Commerce, anti-dumping margins should be set at 48.64% for Jiangsu Zhongji Lamination Materials Stock, 106.09% for Hangzhou Dingsheng Import & Export and related firms, 89.54% for 14 other companies, and 106.09% for the rest of producers in China.
In addition, countervailing duty margins should be set at 17.14% for Jiangsu Zhongji, 19.98% for Dingsheng, 80.97% for Loften Aluminum (Hong Kong), Manakin Industries and Suzhou Manakin Aluminum Processing Technology, and 18.56% for all other producers in China.
The Department of Commerce will be instructing the US Customs and Border Protection office to collect cash deposits from importers of aluminum foil from China based on the final rates. Such imports in 2016 were valued at US$389 million.
“If the US International Trade Commission (ITC) makes affirmative final injury determinations, Commerce will issue AD [anti-dumping duty] and CVD [countervailing duty] orders,” the Commerce Department added. “If the ITC makes negative final determinations of injury, the investigations will be terminated and no orders will be issued.”
Waiting for Trump
The Department of Commerce has also concluded that biodiesel from Argentina and Indonesia is priced lower in the US than at home, and thus subject to anti-dumping duties. The ITC will issue a ruling on April 6.
The US has also initiated investigations into imports of large diameter welded pipes from Canada, China, Greece, India, Korea and Turkey, cast iron soil pipe fittings from China, and rubber bands from China, Sri Lanka and Thailand.
The most controversial issue so far is Commerce Secretary Wilbur Ross’s recommended remedies on steel and aluminum imports, which are awaiting action by President Donald Trump.
The recommendation on steel imports is:
- A global tariff of at least 24% on all steel imports from all countries, or
- A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
- A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.
On aluminum imports, Ross’s recommendation is:
- A tariff of at least 7.7% on all aluminum exports from all countries, or
- A tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or
- A quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States.
Trump is required to make a decision on the steel recommendations by April 11 and on the aluminum recommendations by April 19. The president can decide not to take action, choose one of the recommended steps or make modifications, such as adjusting percentages.
Fears for trade protectionism
The proposed courses of action are stoking fears of intensified trade protectionism, as other countries mull retaliatory action against the United States.
“Trade wars can come up any time, and in ways that we don’t expect,” Roberto Azevedo, director general of the World Trade Organization, has warned. He says he misses the “constructive spirit” of the United States in the past.