U.S. Commerce Department Investigation Uncovers Chinese Aluminium Foil Subsidies of Up To 81 Percent

U.S. Commerce Department Investigation Uncovers Chinese Aluminium Foil Subsidies of Up To 81 Percent

An investigation by the United States Commerce Department issued preliminary findings earlier this week that producers of aluminium foil from the People’s Republic of China received significant government subsidies, and, as a result, customs officials will collect cash deposits from importers at those rates.

According to the report, Commerce Department investigators found Chinese aluminium foil producers to be recipients of subsidies ranging from 16.5 percent to 81 percent. The department has instructed U.S. Customs and Border Protection officials to collect deposits at those rates in an attempt at leveling the playing field.

The Commerce Department determined that Dingsheng Aluminum Industries (Hong Kong) Trading and Jiangsu Zhongji Lamination Materials (both of whom cooperated with the investigation) were paid between 28.33 percent and 16.56 percent. Subsidy rates for Loften Aluminum, Manakin Industries, and Suzhou Manakin Aluminum Processing Technology were assumed based upon third-party evidence, as those firms declined to cooperate with the investigation.

Commerce Secretary Wilbur Ross emphasized the current administration’s focus on fair trade in comments made upon the report’s release.

“The United States is committed to free, fair and reciprocal trade, and will continue to validate the information provided to us that brought us to this decision. The Trump Administration will not stand idly by as harmful trade practices from foreign nations attempt to take advantage of our essential industries, workers, and businesses.”

Chinese aluminium exporters to the United States find themselves increasingly more in the cross hairs of American trade officials, with this week’s findings being only the latest salvo across the bow in the past several months. Mere months after taking office the Trump administration launched a Section 232 investigation into both aluminium and steel imports from the Middle Kingdom and its possible impact upon national security. Results from that investigation are expected toward the end of October. In addition, certain aluminium smelters based in China have been investigated for allegedly avoiding U.S. import duties by re-melting semi-formed aluminium ingots in third countries and marketing them as ingots.

Aluminium at the LME traded above US$2,000 per metric ton on Tuesday, the first time it has done so in nearly three years.