(Bloomberg) -- The U.S. Commerce Department imposed duties as high as 106 percent on aluminum foil from China after concluding that the country’s producers are receiving unfair subsidies and dumping the product in the U.S., according to an American industry group.
The issue now goes before the U.S. International Trade Commission, which is expected to have the final say on the injury claims in a vote scheduled for March 15, the Aluminum Association, which is based in Virginia, said in an emailed statement on Tuesday.
The ruling by Commerce may add to tensions between the U.S. and China, which has rejected that it gives its aluminum producers an unfair advantage. The decision comes the same day a top Chinese adviser, Liu He, was expected to arrive in Washington for discussions over the two nations’ trading and economic relationship.
The Commerce Department press office declined to comment on the aluminum foil ruling.
“U.S. aluminum foil producers are among the most competitive producers in the world, but they cannot compete against products that are sold at unfairly low prices and subsidized by the government of China,” Heidi Brock, chief executive officer of the Aluminum Association, said in an emailed statement.
Aluminum Tariffs
In pursuit of tougher trade rules, President Donald Trump is considering a range of recommendations to curb steel and aluminum imports after the Commerce Department found they threaten national security. The president has until mid-April to make his decision on potential actions, which could include imposing tariffs and quotas on the metals.
The administration in November took the rare step of initiating an anti-subsidy and anti-dumping investigation into Chinese aluminum alloy on behalf of the domestic industry, a move that companies usually lead.
The U.S. is joined with Europe and other Asian nations over concerns that China’s excess industrial capacity is distorting prices on the global markets.
U.S. producers of aluminum foil have been exerting pressure for protections over what they say is unfair foreign competition. A surge in cheap Chinese imports from 2006 “decimated” prices for foil in the U.S., according to Beatriz Landa, vice president at Novelis Corp., which makes aluminum products. “We cannot continue to reduce prices on our product offerings and remain sustainable,” Landa said at an ITC hearing on the case in Washington this month.
At the same hearing, a spokeswoman for the Chinese metals industry, Xinda Mo, said the aluminum market in both countries has been shaped by independent investment decisions by companies, market demand and shifts in supply dynamics.
U.S. imports of aluminum foil from China were an estimated at $389 million in 2016, according to Commerce.
The Trump administration has doubled down on stricter trade enforcement. New investigations into dumping and countervailing duties cases rose by 60 percent during Trump’s first year in office, according to the White House’s 2019 budget proposal document.