U.S. Commerce Dept 'self-initiates' dumping probe of Chinese aluminum

WASHINGTON (Reuters) - The Trump administration launched an aggressive new trade action against imports of Chinese aluminum alloy sheet on Tuesday, the first U.S.-initiated anti-subsidy and anti-dumping probes in decades, drawing a strong reaction from Beijing.

A worker watches as excavators load aluminium ore onto trucks at an open-cast mine in Xiaoyi, Shanxi province, November 2, 2010. REUTERS/Stringer

China expressed its “strong dissatisfaction” at the move, with its Ministry of Commerce saying in a statement on Wednesday the action would hurt both countries’ interests.

Washington’s seldom-used tactic is aimed at accelerating the imposition of duties against unfairly subsidized and dumped products. U.S. companies and industries claiming injury from imports would normally first ask the Commerce Department to open such probes, but government-initiated cases skip that step.

“President (Donald) Trump made it clear from day one that unfair trade practices will not be tolerated under this administration, and today we take one more step in fulfilling that promise,” Commerce Secretary Wilbur Ross said in a statement on Tuesday.

The case shows “that we stand in constant vigilance in support of free, fair and reciprocal trade,” he added.

The Commerce Department last initiated an anti-subsidy duty investigation in 1991 on softwood lumber from Canada and an anti-dumping probe in 1985 on semiconductors from Japan.

The aluminum move against China comes less than a month after Trump’s first trip to Beijing, during which he heaped praise on Chinese President Xi Jinping and lauded U.S. business deals with China valued at hundreds of billions of dollars..

In a statement on the website of China’s Ministry of Commerce, Wang Hejun, director of the ministry’s Trade Remedy and Investigation Bureau, said he hoped the United States would stick to the consensus recently reached by the two countries’ heads of state on trade and act to promote “healthy and stable” trade relations.

Wang also said China would take necessary measures to safeguard the rights and interests of Chinese enterprises.

The anti-dumping and anti-subsidy probes are separate from Commerce’s national security investigations into aluminum and steel imports that could lead to broad import restrictions for both metals. U.S. steel and aluminum makers both blame Chinese excess capacity for depressing global prices and threatening their financial viability.

In a separate anti-dumping an anti-subsidy investigation into aluminum foil, the Commerce Department in October imposed combined preliminary duties of 108 to 243 percent.

Ross told U.S. aluminum industry executives on a conference call that Commerce has evidence that China’s aluminum producers were selling flat-rolled sheet products in the United States at prices below fair value and were benefiting from unfair government subsidies.

“Available evidence also indicates that U.S. producers of aluminum sheet are suffering injury caused by these imports,” Ross said.

The Commerce Department estimated anti-dumping duties of about 56.54 percent to 59.72 percent in the aluminum case. It said imports from China of the flat-rolled metal typically used in construction and in transportation and electrical equipment totaled about $603.6 million in 2016.

The probe excludes aluminum used in beverage can manufacturing.

The case is expected to follow the normal process of a Commerce Department anti-dumping and anti-subsidy investigation, subject to injury reviews by the independent U.S. International Trade Commission.

If allowed to proceed, preliminary anti-subsidy duties could be issued in February 2018 with preliminary anti-dumping duties issued in April.

Reporting by David Lawder; Additional reporting by Dominique Patton in BEIJING; Editing by G Crosse, Cynthia Osterman and Tom Hogue