The results of a preliminary anti-dumping probe carried out by US authorities on Chinese Aluminum Foil Imports are due soon. Chinese aluminum foil manufacturers have been accused of dumping foil in the US by American foil producers. The U.S. Commerce Department has been analyzing the status of China as an NME (non-market economy) country.
Under WTO (World Trade Organization) rules, China was given a special presumption of NME status in 2001. This was a legal presumption under the WTO protocol in force when China joined the organization. If such a country is deemed to export goods at artificially low prices, its trading partners can take certain steps. Specifically, they may apply additional ‘anti-dumping’ duties on top of any other import duties applied. The US has been applying such anti-dumping duties on certain goods imported from China, particularly Chinese aluminum foil.
US foil producers have complained to the government that the Chinese are exporting aluminum foil at unfairly low prices. Fundamentally, they claim that China is dumping foil into the US market and anti-dumping duties should be applied.
China, on the other hand, maintains that its status as a non-market economy expired on 11th December, 2016. It is claiming that is it should now be treated as a market economy. This would limit the amount of anti-dumping duties that can be applied to products imported from China. China is complaining about the surrogate pricing being applied.
At the time of China joining the WTO, the terms of its joining allowed other members to apply third-party (other WTO members) pricing to assess whether goods were being sold by China at below cost or at a fair market price. China maintains this surrogate pricing also to have expired on December 11 last year.
The U.S. Commerce Department has been investigation both sets of claims. On Thursday, it announced a delay in the announcement of its results of a preliminary probe. It needs more time to investigate fully whether or not China’s claims to being a market economy have any substance. Also, to ensure fairness to the US aluminum industry.
Its findings on both the Chinese aluminum foil anti-dumping duties and China’s market status will be published on November 30. A “final duty determination” is expected about 75 days after that.