In Rare Move, Trump’s Commerce Secretary Self-Initiates Chinese Aluminum Trade Remedy Cases

The U.S. Department of Commerce self-initiated antidumping and countervailing investigations of common alloy aluminum sheet from China on November 28. An accompanying fact sheet estimates dumping margins on the subject merchandise to be between 56.54 and 59.72 percent, and estimates a subsidy rate above de minimis. Trade cases are typically initiated in response to petitions filed by a domestic industry alleging that dumped or unfairly subsidized goods are being exported to the U.S. market. Self-initiation authority, however, can be exercised whenever the Secretary determines that a formal trade remedy investigation is warranted based on available information.

The Department’s use of self-initiation authority has been judicious and rare. In an agency-issued press release Secretary Wilbur Ross stated, “{w}e are self-initiating the first trade case in over a quarter century, showing once again that we stand in constant vigilance in support of free, fair, and reciprocal trade.” The Department further noted that it last self-initiated a countervailing duty investigation in 1991 on softwood lumber from Canada, and last self-initiated an antidumping duty investigation in 1985 on semiconductors from Japan.

Use of U.S. AD/CVD laws have increased by 65 percent under the Trump Administration, according to the press release, and appear to be a key instrument of choice to combat unfairly traded exports and protect injured and vulnerable domestic industries. The agency notes, apart from the self-initiated cases, that it has initiated 77 combined AD and CVD cases in response to domestic industry petitions in 2017 – in contrast to 48 combined AD/CVD cases initiated in 2016. In addition to these self-initiated dumping and subsidy cases focusing on aluminum from China, the Commerce Department has also initiated a broader Section 232 investigation to determine whether aluminum imports overall threaten to impair the national security. If the Commerce Department issues an affirmative finding, the President has broad power to impose trade remedies – including tariffs and quotas – to adjust” the imports so that they will not threaten to impair the national security. The Commerce Department’s Section 232 aluminum determination is due in January 2018.

In terms of next steps for the aluminum sheet AD and CVD cases, International Trade Commission preliminary determinations are due on or before January 16, 2018. If the ITC issues an affirmative preliminarily determination that there is injury or threat of injury, then the Commerce Department investigations will continue with deadlines of February 2018 to issue a preliminary CVD determination, and April 2018 to issues a preliminary AD determination. Affirmative preliminary Commerce determinations would allow Customs and Border Protection to begin collecting cash deposits from all U.S. companies importing the subject aluminum sheet from China. If the investigations proceed without any extensions in the preliminary phase, the Commerce Department’s final determinations would be due in April 2018 and July 2018 for the CVD and AD investigations, respectively.