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Quick Counterattack! Chinese Aluminum Foil Manufacturers Will Defend US Countervailing Rulings
Sep 06, 2017

In the face of the prospect of a high "double reverse" tariff on China's exports of aluminum foil products, China's large export enterprises to Alcoa may have been prepared to defend the US side's preliminary ruling this week.

China's largest aluminum foil exporter, Shandong Hongchuang Aluminum Holdings Co., Ltd. (formerly known as "Shandong Lufeng Aluminum Foil Co., Ltd.") will join the other 11 companies to jointly counter the US ruling. China Nonferrous Metals Industry Association (CNIA) will take the lead and file a complaint with the US International Trade Commission.

The report mentions that this will be the first trade decision since the Trump government took office. According to Hong Chong Aluminum officials, the companies plan to launch a complaint this month.

On the 8th of this month, the US Department of Commerce announced preliminary results, finds that China's exports to the US aluminum foil products received 16.56% to 80.97% range of subsidies.

According to the procedures, the US Department of Commerce and the International Trade Commission will be in October and December this year, the final ruling on the investigation. If the two organizations are final ruling, China's exports to the United States to such products to the United States related industries caused substantial damage or threat, the US Department of Commerce will require the relevant products to impose "double reverse" - anti-dumping, countervailing duties.

Reuters mentioned that if the US final ruling also found preliminary results, Hong Chong Aluminum will face up to 80.97% countervailing duties.

Aluminum is vital to US "national security"

In April this year, the United States has started to investigate the import of steel and imported aluminum. Wall Street had previously mentioned that both of these surveys were rare in the use of Article 232 of the Trade Extension Act of 1962. The terms empower the US Department of Commerce to investigate the impact of imports on national security, and the President of the United States has the right to restrict imports at the end of the investigation.

Trump also signed the relevant administrative memorandum of aluminum imports at the end of April, saying that the US aluminum industry was "undermined by unfair overseas trade." For the US national security, the domestic aluminum industry is essential.

Although steel and aluminum investigations are not aimed at a country, it is product-oriented, but as we all know, China is the world's largest steel producer, China's steel exports have always been the "main battlefield" of Sino-US trade friction, and China is also the United States The second largest source of aluminum imports, the size of China's imports of aluminum after Canada.

Last year, China's aluminum production accounted for more than half of global output, exports of 1.1 million tons of aluminum foil, an increase of 13% over the previous year, the export scale is more than twice the beginning of this century.

Wall Street has previously cited the analysis that Trump is actually "national security" for the excuse to combat steel dumping, and this decision may complicate Sino-US relations, especially in Trump clearly to the Sino-US trade Negotiations are linked to China's attitude towards North Korea.

Or have more trade protection actions

It is worth mentioning that the US Department of Commerce said Tuesday that the preliminary ruling was independent of the aluminum product investigation initiated in Article 232 of the Trump administration in April this year. The results of the investigation with the same kind of steel have not yet been announced. This means that future findings may pose a further threat to China's exports of aluminum and steel products.

In April, US Secretary of Commerce Ross told the Financial Times that the Trump government's trade protectionists were wrongly criticized and said that the degree of trade protection in the United States was far less than that of Europe, Japan and China. At the end of April, Ross also said that the scope of the national security trade investigation could be extended to semiconductors and aluminum, in the field of trade in the semiconductor and aluminum worthy of investigation.

At the end of June, US new media Axios mentioned that Trump and some of its senior advisors would impose tariffs on imported steel products at a rate of 20%. The levy could be extended to other imported products such as aluminum, paper, semiconductors and washing machines.

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