REPORT: U.S. Foil Investments Up After AD/CVD Decision Drives Down Imports from China
Today, the Aluminum Association released a new white paper, Targeted Trade Enforcement in Action: Aluminum Foil AD/CVD One-Year Later, highlighting progress made following the Commerce Department’s final application of antidumping (AD) and countervailing duty (CVD) orders on imports of certain aluminum foil from China. The Commerce Department published final antidumping and countervailing duty orders in the market on April 19, 2018. The report includes new data highlighting a nearly two-thirds drop in imports of unfairly subsidized Chinese aluminum foil and $169 million in U.S. investment in the segment.
“One year after taking strong action to enforce our nation’s trade laws, we are seeing clear and significant progress in the U.S. aluminum foil market,” said Heidi Brock, president & CEO of the Aluminum Association. “We’d once again like to recognize the hard work of the administration, including the Commerce Department and the International Trade Commission, in helping aluminum foil producers in the U.S. to compete on a level-playing field.”
In March of 2017, the Aluminum Association filed its first unfair trade case in its 85-year history against a number of aluminum foil products coming from China. Following an extensive, year-long process, the Commerce Department published final AD/CVD margins on most types of aluminum foil imported to the United States from China on April 19, 2018. The orders ranged from 55 to 176 percent, reflecting the substantial magnitude of the unfair trade practices by Chinese producers and exporters of aluminum foil.
The Targeted Trade Enforcement in Action white paper highlights a number of key developments in the market since the unfair trade orders came into effect, including:
- The volume of aluminum foil imports from China fell by 64 percent between 2017 and 2018;
- While aluminum exports from China surged 21 percent to the rest of the world in 2018 they declined in the United States; and
- U.S. producer shipments of aluminum foil increased 1.6 percent to 969.6 million pounds in 2018.
The report underscores how a targeted approach to trade enforcement can have a real, meaningful and positive impact on U.S. manufacturers. A study earlier this year by the Organization for Economic Cooperation and Development (OECD) documented massive subsidies for Chinese aluminum producers - $70 billion over the past five years. Fully 85 percent of the government support cited in the study went to five aluminum-producing firms in China. The Aluminum Association favors this kind of targeted trade action to address the symptoms of persistent Chinese overcapacity in the aluminum industry, which is impacting the entire value chain.
“Not all tariffs are created equal,” added Brock. “Targeted trade enforcement -- as we’ve seen successfully deployed in the aluminum foil and, more recently, common alloy sheet markets -- is the best way to make an impact. This approach allows us to effectively address issues in the marketplace while avoiding needless and disruptive tariffs on vital trading partners who play by the rules.”
The Trump administration has a historic opportunity to address structural aluminum overcapacity in China as part of ongoing trade negotiations. The Aluminum Association is encouraging the administration to “prioritize the pervasive subsidies and other policies that fuel China’s structural overcapacity across the aluminum value chain as part of the ongoing bilateral negotiations.”
Resolving ongoing structural overcapacity in China is the best way to ensure continued growth and investment in the domestic aluminum industry for the long-term. In the meantime, the association is joining voices ranging from the Chamber of Commerce to the United Steelworkers and lawmakers from both sides of the aisle in calling for the removal of Section 232 tariffs as part of final implementation of the U.S-Mexico-Canada Agreement.
To learn more please visit https://www.aluminum.org/timeforaction.