Commerce: Chinese aluminum imports subsidized (Friday, September 3, 2010)

A preliminary determination by the U.S. Commerce Departmentí»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 to make its final determination in this case in November.

Countervailing duties are imposed after an investigation determines that U.S. imports 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 this week, Commerce said 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 .

"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," said Deputy Assistant Secretary for Import Administration Ronald K. Lorentzen in a statement.