U.S. aluminum group lodges complaint against China over foil prices

U.S. aluminum producers filed an antidumping complaint against China on Thursday, charging they’ve suffered “material injury” from cheap imports that benefited from Chinese government subsidies.

The Aluminum Association, which filed the complaint with U.S. regulators on behalf of its members, said that Chinese aluminum foils were sold at deep discounts in the U.S. during the second half of 2016, ranging from 38% to more than 134% less than fair value.

The complaint asks the Department of Commerce and the International Trade Commission to consider anti-dumping duties, reflecting the discount rates, to correct what the group says is “unfair pricing.”

“Today’s action marks the first time the Aluminum Association has filed unfair trade cases on behalf of its members in its nearly 85-year history,” said Heidi Brock, CEO of the Aluminum Association.  “This unprecedented action reflects both the intensive injury being suffered by U.S. aluminum foil producers and also our commitment to ensuring that trade laws are enforced to create a level playing field for domestic producers.”

US lodges trade complaint over Chinese aluminum

In trying to preserve economic growth and stable employment, China has maintained massive excess capacity for producing steel, glass, cement, paper, solar panels and other industrial products. Its foreign investments and infrastructure projects abroad have helped to absorb some of its overcapacity. But the government has employed subsidies to help exporters looking to unload unused goods.

Chinese aluminum foil producers, whose goods are used in a variety of consumer and industrial applications, benefit from 27 government subsidy programs, the complaint said.

Unfair Chinese practices put U.S. aluminum jobs at risk

The Trump administration has been vocal about being more aggressive in trade deals with China and other countries, including using tariffs and seeking more equitable financial terms for imports.

During the Obama administration's final days, the U.S. Trade Representative filed an enforcement complaint with the World Trade Organization over China's aluminum subsidies.

The association, based in Arlington, Va., has been working with aluminum producers for “a couple of years” to study the issue of overcapacity of industrial goods in China and to prepare its case, said Matt Meenan, a spokesman for the association. “We worked with the previous administration on a number of aspects, but we’re also working with the current administration as well,” he said.

Twelve years ago, U.S. production accounted for about 84% of domestic aluminum foil demand, the Aluminum Association said. With imports flooding the market, it has dropped to 69%, resulting in more manufacturers shedding jobs and closing factories. Chinese imports now make up about 22% of the U.S. market for aluminum foil and account for about 71% of the total U.S. aluminum foil imports.

“The reduction in domestic sales volume, as well as depression of U.S. prices by subject imports, has resulted in lost sales, decreased employment, and financial deterioration,” the complaint said.

Chinese aluminum producers, which make more than half the world’s aluminum, produced a new high of 2.95 million tons in the month ending in mid-February, according to data from the International Aluminum Institute in London.