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Chinese Aluminum Subsidies Protested in New WTO Case

Monday, January 16, 2017
Sandler, Travis & Rosenberg Trade Report

In what the Office of the U.S. Trade Representative characterized as the latest in a series of “strong steps” to address the excess capacity situation in China’s aluminum sector, the U.S. filed a complaint at the World Trade Organization Jan. 12 concerning China’s subsidies to certain producers of primary aluminum.  The alleged subsidies include artificially cheap loans from banks and artificially low-priced inputs such as coal, electricity, and alumina.

The U.S. believes the use of these subsidies has generated excess capacity and production in China’s aluminum sector, which is contributing to lower global primary aluminum prices and the displacement or impedance of U.S. exports into China and third-country markets. USTR notes that from 2007 to 2015 Chinese primary aluminum production increased by approximately 154 percent and capacity increased by approximately 243 percent while global prices fell by approximately 46 percent. During the same period U.S. primary aluminum production decreased by approximately 37 percent and capacity decreased by approximately 46 percent even though overall U.S. consumption increased. 

U.S. efforts to counter Chinese aluminum overcapacity have also included its antidumping and countervailing duty orders on aluminum extrusions from China, which currently provide for substantial AD and CV duty rates for imports of subject goods. Contact Mark Ludwikowski or Kristen Smith at (202) 216-9307 for more information.

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