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August 14, 2017

Commerce Department Finds Chinese Aluminum Foil Benefits From Unfair Subsidies

The U.S. Commerce Department released a preliminary decision last Tuesday night that said the U.S. government will impose duties of 16.5 percent to 81 percent on Chinese imports of aluminum foil. In a statement, Commerce Secretary Wilbur Ross said, “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.” Ross also said, “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.”

The announcement means the Commerce Department now will instruct U.S. Customs and Border Protection to collect cash deposits from importers of aluminum foil from China based on these preliminary rates.

As Reuters reported Wednesday, Chinese producers already are preparing to challenge the Commerce Department’s ruling.

The Metals Service Center Institute supported this investigation, which was requested by the Aluminum Association (AA). According to AA, 12 years ago U.S. production of aluminum foil accounted for about 84 percent of all domestic aluminum foil demand and today that figure has dropped to 69 percent. At the same time, Chinese imports have grown from essentially zero percent of the total U.S. aluminum foil market in 2004 to 22 percent of the market today. Chinese imports of aluminum foil totaled about $389 million in 2016.

As the Commerce Department noted, the aluminum foil case is independent of the Aluminum 232 investigation, launched in April, that is looking at whether aluminum overcapacity, dumping, illegal subsidies, and other factors, threaten American economic security and military preparedness. The results of that investigation still have not been released.