For Immediate Release: August 31, 2010
Contact: Tim Truman (202) 482-3809
Preliminary Commerce Investigation Finds Chinese Aluminum Imports Unfairly Subsidized
Department also finds China currency subsidy allegations do not meet legal requirements to initiate investigation
WASHINGTON – A preliminary determination by the Commerce Department’s Import Administration has found that $514 million of aluminum products imported from China in 2009 were unfairly subsidized. As a result of the preliminary determination, importers of Chinese aluminum extrusions will be required to post cash deposits or bonds at rates determined by the Import Administration. If Commerce makes a final determination that Chinese exporters or producers received an unfair subsidy under international law, and the U.S. International Trade Commission finds that domestic industry was harmed, those imports would be subject to countervailing duties (CVD).
The affirmative preliminary determination found that Chinese producers/exporters have received countervailable subsidies ranging from 6.18 to 137.65 percent. Commerce is currently scheduled to make its final determination in this case in November.
Countervailing duties are imposed after a detailed investigation determines that imports into the United States have been unfairly subsidized by foreign governments and are injuring domestic producers. U.S. industries can file petitions with Commerce asking for an investigation of illegal subsidies. Aluminum extrusions are shapes and forms produced via an extrusion process of aluminum alloys, generally used in construction applications, incorporated into window and door frames, and serving as parts for vehicles and furniture.
Also today, the Department of Commerce announced that two allegations before it that China’s currency practices constitute an unfair subsidy under U.S. countervailing duty law failed to meet the requirements for the initiation of an investigation. The currency allegations under review were made in the context of both the aluminum extrusions case as well as a CVD investigation of coated paper from China.
“Today’s currency decision was based on a careful evaluation of the specific legal arguments and evidence put before the department, in relation to the standards for the initiation of an investigation under the CVD law,” Deputy Assistant Secretary for Import Administration Ronald K. Lorentzen said. “In these two cases, the Department has determined not to investigate whether the alleged undervaluation of China’s currency, the RMB or yuan, is a countervailable subsidy, because the allegations made by domestic producers do not meet the statutory standard for initiating an investigation under the requirement that benefits provided under China’s unified foreign exchange regime be specific to the enterprise or industries being investigated.”
In addition to today’s decisions, Commerce last week announced a package of 14 measures – especially focused on unfair import practices by non-market economies – that will strengthen trade enforcement and help keep U.S companies competitive. These steps support President Obama’s National Export Initiative (NEI), which aims to double exports in the next five years and support the creation of several million new jobs. The proposed changes came in response to U.S. Commerce Secretary Gary Locke’s call to survey the agency’s current trade remedy practices in order to determine how the department could improve the effectiveness of its existing enforcement tools.
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