US and China clash on tariffs on Chinese aluminium foil

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US Commerce Secretary Wilbur Ross and Chinese Vice Premier Wang Yang. Reuters

WASHINGTON (AFP) – The US on Tuesday upheld tariffs imposed last year on imports of Chinese aluminum foil valued at nearly $400 million a year, angering Beijing which vowed to hit back.

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The decision intensified the mounting trade confrontation between Beijing and Washington, which is considering far-reaching duties on Chinese goods in an effort to reduce the US trade deficit.

However, the move was unrelated to the White House’s imminent decision on whether to retaliate against high imports of aluminium and steel, which the Commerce Department claims are undermining US national security preparedness, with the finger pointed principally at Beijing.

The agency said Chinese manufacturers have been dumping aluminium foil into the US market at below market price, with margins between 48.6 percent and 106.9 percent. The product also benefitted from unfair subsidies at rates as high as 80.9 percent.

“This administration is committed to trade that is fair and reciprocal, and we will not allow American workers and businesses to be harmed by unfair imports,” Commerce Secretary Wilbur Ross said in a statement.

“This decision comes after a transparent process with a thorough and unbiased review of the facts.”

China has warned that Washington risks undermining vital trade relations by threatening to impose tariffs on its exports, with the commerce ministry voicing “strong discontent” over the action on aluminium foil.

Wang Hejun, a ministry official, said in a statement that the “unreasonable overuse of trade remedy measures by the US side” will fail to revive the country’s aluminum foil industry, affect jobs in the US and hurt consumers there.

“Regarding the wrong practices of the US, China will take necessary measures to safeguard its own legitimate rights and interests,” Mr Wang said.

Analysts also say such actions also increase the chances of a tit-for-tat trade war.

Commerce Department investigators had reached preliminary findings in August and in October that Chinese exporters were dumping aluminum foil, worth an estimated $389 million in 2016, on the US market.

US customs authorities were instructed to collect cash deposits on imports at the time.

The independent US International Trade Commission is due to vote in April on the separate question of whether domestic industry has been harmed by the imports.

Should the ITC fail to find in the affirmative, the tariffs will be cancelled. The commission rarely blocks the imposition of tariffs.

The Commerce Department claims to have launched 102 such trade cases against dumping and unfair subsidies, nearly doubling the number of actions brought by the prior administration during the same period.

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