U.S. Commerce Dept. To Investigate Illegal Dumping By Chinese Extruders April 22, 2010

BEIJING — China's Commerce Ministry has finalized an antidumping ruling on certain types of nylon imports from four of its trading partners, hitting the U.S. with the highest duty for the material, which is used to make goods ranging from toothbrushes to gun frames to chiffon.

Reuters

A worker inspects aluminium ingots for export at the Qingdao Port in Shandong province last month.

The decision came as the U.S. Commerce Department moved to launch an investigation into whether certain aluminum forms made in China are being unfairly subsidized and dumped, or sold at less than the fair value, in the U.S. market.

China has recently become more aggressive in trade disputes, and the latest ruling, stemming for an investigation of alleged nylon dumping that began a year ago, comes ahead of high-level talks among China and its two largest trading partners, the European Union and the U.S., in coming weeks.

China, which in October levied preliminary duties on imports of Nylon 6, or polycaprolactam, from the U.S., EU, Russia and Taiwan, increased the duty on nylon 6 for U.S. companies to 96.5% from the preliminary rate of 36.2%, effective for five years, the ministry said in a final ruling posted on its Web site Wednesday.

But it kept unchanged the 36.2% duty against Honeywell International Inc.'s Honeywell Resins & Chemical LLC, and lowered to 29.3% from a preliminary 30.4% the duty against the U.S. operation of German chemical giant BASF SE.

Duties against companies in the EU, Russia and Taiwan of between 4% and 23.9% were unchanged from their preliminary levels.

European Commission President Jose Manuel Barroso is leading a delegation of EU commissioners at the end of this month for talks with China Premier Wen Jiabao and other Chinese officials.

In late May, the U.S. and China will hold their Strategic and Economic Dialogue in Beijing.

Meanwhile, the U.S. investigation, sought by U.S. makers of the aluminum products and the union representing their workers, could lead to the imposition of duties on the Chinese imports as soon as June, if the Commerce Department finds evidence of unfair trade practices.

At issue are Chinese-made aluminum forms that are used in gutters, window and door frames and as elements in cars, trucks and boats.

The U.S. manufacturers also alleged in their petition that the undervaluation of the Chinese currency serves as an unfair subsidy. But Wednesday's decision doesn't rule one way or the other on that allegation, and a Commerce Department official said "we are still considering the specific allegation on currency manipulation."

U.S. companies previously petitioned the U.S. government, in 10 other cases over the last few years, to investigate whether an undervalued Chinese currency served as a de facto subsidy for its exports. U.S. officials in each of those cases declined to pursue investigations, citing insufficient information.

From 2007 to 2009, imports of aluminum extrusions from China increased 90% by volume, according to a Commerce Department fact sheet. In 2009, imports of aluminum extrusions were valued at an estimated $514 million.

Before the Commerce Department makes a preliminary decision on whether to impose punitive tariffs, the International Trade Commission must first determine whether the increase in imports has harmed U.S. manufacturers.

That "injury" determination is expected by May 17. If the ITC delivers an affirmative decision, the Commerce Department could impose countervailing duties as early as June 24 and antidumping duties by Sept. 7.

Commerce is already pursuing a separate investigation into allegations of unfair trade practices involving Chinese coated paper.

The petition from U.S. aluminum manufacturers alleges that the products are being dumped by a margin of 32%-33%.

A statement posted on the Chinese Commerce Ministry's Web site Thursday said, "In 2009, the amount of trade-relief cases by the U.S. against China increased 53% compared with the previous year, while the value involved in these cases increased eight times compared with that in 2008. Such behavior by the United States to abuse trade-relief measures has hugely harmed Chinese interests, and is having a negative impact on trade between the two countries."

The statement also said the government "hopes the U.S. will avoid the antisubsidy investigation on the [yuan] issue, which is not in accordance with the WTO rules."

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