Duties coming on aluminum containers from China following US trade ruling

Key Takeaways:

• USITC finds harm to U.S. industry from Chinese aluminum imports.
• Antidumping and countervailing duties to be imposed by the U.S. Department of Commerce.
• AFCMA initiated the complaint leading to the investigation.
• Concerns over transshipment through Thailand and Vietnam to avoid duties.
• The Aluminum Association supports the decision, citing China’s unfair subsidies.

USITC Rules Against Chinese Aluminum Imports

The U.S. International Trade Commission (USITC) has determined that imports of disposable aluminum containers, pans, trays, and lids from China are causing harm to the U.S. industry. Announced on April 11, the ruling states that these products are sold in the United States at less than fair value and are subsidized by the Chinese government.

AFCMA’s Role in the Investigation

The decision comes after the Aluminum Foil Container Manufacturers Association (AFCMA), along with member companies such as Durable Packaging International, Handi-foil Corp., and Reynolds Consumer Products, filed a complaint in May 2024. The complaint prompted a federal investigation into the impact of Chinese imports on the domestic market.

“The International Trade Commission’s determination will provide much-needed relief to domestic producers of disposable aluminum containers that were losing sales and being forced to lower their prices to compete with extremely low-priced imports from China,” said John Herrmann, counsel to the AFCMA.

Antidumping and Countervailing Duties Imminent

Following the USITC’s ruling, the U.S. Department of Commerce is set to issue antidumping and countervailing duty orders on imports of these aluminum products from China. The duties aim to counteract the unfair pricing and government subsidies identified in the investigation. The USITC plans to publicly release its full report on the determination by May 26.

Industry Reactions and Support

The Aluminum Association, while not directly involved in the case, expressed support for the government’s findings. Charles Johnson, President and CEO of the association, stated, “As our industry and several third parties have long documented, the government of China continues to provide massive subsidies to its aluminum sector which distorts global markets and encourages unfair trade.”

Concerns Over Transshipment Through Southeast Asia

Despite the forthcoming duties, there are growing concerns about Chinese companies potentially circumventing U.S. trade measures. An AFCMA spokesperson revealed plans to file a new complaint urging the USITC to investigate the transshipment of aluminum foil containers through Southeast Asian countries, particularly Thailand and Vietnam.

Import data from recent months indicates a “significant increase” in aluminum foil container imports from these countries. U.S. distributors have reportedly been sourcing products from alternative nations to avoid the impending duties, raising alarms over the effectiveness of the trade enforcement.

Broader Context of Trade Enforcement

This action against Chinese aluminum imports is part of a broader effort by U.S. authorities to address unfair trade practices. The Aluminum Association has previously highlighted issues such as Mexican brewers and can makers utilizing Chinese aluminum sheets for beer cans that are then imported into the United States. Recent tariffs imposed by the Trump administration on aluminum cans and beer imports aim to mitigate such circumventions.

Looking Ahead

The implementation of antidumping and countervailing duties marks a significant step in protecting the domestic aluminum industry. However, the challenges of enforcing these measures and preventing circumvention through third countries remain. Industry groups and trade authorities are poised to continue monitoring import patterns and taking necessary actions to ensure fair competition.