The Department of Commerce (Commerce) has announced its affirmative preliminary determination in the antidumping duty (AD) investigation of imports of aluminum foil from the People’s Republic of China (China). While the preliminary antidumping duty rates, ranging from 96 percent to more than 162 percent, will not be finalized by Commerce until late February 2018, Commerce will instruct U.S. Customs and Border Protection (CBP) to require cash deposits based on these preliminary rates.
The merchandise covered by these investigations is aluminum foil having a thickness of 0.2 mm or less, in reels exceeding 25 pounds, regardless of width. The implications of this trade remedy action, however, are potentially more far reaching and may affect U.S.-China trade relations. The preliminary determination comes just weeks before President Trump travels to China, and China was quick to state that it was “strongly dissatisfied” with the determination. A key issue in this investigation is the U.S. government’s continued treatment of China’s economy as a “nonmarket economy.” Commerce relied upon surrogate/third-country pricing analysis to conclude that China was dumping its aluminum foil in the U.S. market. Upon China’s accession to the World Trade Organization (WTO), other WTO members were allowed to use such a nonmarket economy methodology in antidumping duty matters involving China. Commerce continues to use this methodology, arguing that China still does not operate as a market economy due to continuing government price controls and other governmental involvement. China argues that this clause in its accession agreement has now expired and that its goods must be accorded market economy status.