The Trump administration fired a trade salvo at China on Tuesday by launching a pair of investigations that could lead to steep duties on imports of aluminum sheet valued at more than $600 million.
The move was the first time a U.S. administration has “self-initiated” an anti-dumping or countervailing duty case in at least 25 years and marked an escalation of the Trump administration’s antagonistic trade relationship with Beijing.
Most trade remedy cases begin with a petition, whether it be filed by an industry group, a collection of companies, or even an individual firm. Such petitions generally accuse foreign producers of selling products in the U.S. at unfairly low — or “dumped” — prices, or they take issue with a foreign company receiving government subsidies that give them an unfair advantage.
But in this case, the Trump administration took action in the absence of a petition as it continues to drive a hard line against China for what the White House views as Beijing’s unfair trade practices and government support of industry.
The Commerce Department has had the authority to self-initiate anti-dumping and countervailing duty investigations since 1980, but has used it sparingly. The last self-initiated countervailing duty investigation was against imports of Canadian softwood lumber in 1991, and the last self-initiated anti-dumping case was against imports of Japanese semiconductors in 1985.
Commerce Secretary Wilbur Ross, in a conference call with aluminum industry executives on Tuesday, welcomed the fact that industry-driven anti-dumping and countervailing duty cases are up markedly in the first year of the Trump administration — and said he wants to receive more of them.
“While we stand ready to self-initiate investigations where warranted, I once again encourage those with knowledge of unfair trade practices to come forward so that Commerce can defend against such inequities,” Ross said.
Commerce worked with the Aluminum Association, an industry group, to help develop the case, but took the step of initiating the two investigations on its own, Ross said during the call. Both the anti-dumping and the countervailing duty probes could take up to a year to complete.
For the duties to be imposed, the U.S. International Trade Commission must make both a preliminary and a final determination that U.S. producers have been materially injured or threatened with material injury by the Chinese imports.
“In this case, available evidence indicates that Chinese producers are selling aluminum sheet in the United States at prices that are less than fair value and that the Chinese government is providing unfair subsidies to producers of aluminum sheet,” Ross said. “Available evidence also indicates that U.S. producers of aluminum sheet are suffering injury caused by these imports.”
Commerce’s decision to self-initiate the two investigations “sends a strong signal to China that the United States will aggressively enforce its trade laws,” Aluminum Association CEO Heidi Brock said during the call with Ross.
Common alloy aluminum sheet has a variety of uses in building and construction, transportation, basic electrical applications and home appliances. It is “a key product segment for the U.S. aluminum industry,” Brock said, noting that U.S. producers supply about 2 billion pounds of sheet each year out of the total U.S. market of about 26 billion pounds.
The two investigations will cover about $603.6 million worth of common alloy aluminum sheet imports from China. Ross said the probes are separate from other trade cases involving aluminum that the department is now handling. Those include an active investigation into aluminum foil imports from China as well as a much broader probe, under Section 232 of the Trade Expansion Act of 1962, which could lead to duties being imposed on aluminum imports from a variety of countries to protect manufacturing interests that are critical to U.S. national security.
Despite the administration’s decision to opt for a unilateral move absent a petition, Commerce officials said the two probes would be conducted the same as any other anti-dumping and countervailing duty investigation. According to that process, the ITC will make preliminary injury determinations on or before January 16. If the two cases clear that hurdle, Commerce will announce preliminary countervailing duties in February and preliminary anti-dumping duties in April.
President Donald Trump “made a promise to American businesses, workers and farmers that he would vigorously enforce our trade laws and be more enforcement-minded than our predecessors,” Ross said. “Today’s action shows that we intend to make good on that promise to the American people.”