The Obama administration filed a trade complaint with the World Trade Organization on Thursday against China for allegedly "dumping" aluminum on the global market at artificially low prices.
The complaint begins a process to address US concerns that China's subsidies appear to have caused serious prejudice under WTO rules to USA interests by artificially expanding Chinese capacity, production and market share and causing a significant lowering in the global price for primary aluminum.
The pending complaint follows an October request for a WTO case against China's aluminum trade practices by the two US senators from OH, home to several USA aluminum producers, and six other senators. They added that China did this at a time when global prices for primary aluminum were plunging and production in the rest of the world remained flat, undercutting the prices of USA producers to an extent that decimated the American industry.
Brown and Portman say that 15,000 US workers in aluminum production have lost their jobs in the last decade, including 1,500 in the past year.
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Chinese exports have risen steeply over the last few years.
"We expect China to take the problem of excess capacity seriously and take concrete steps to address our concerns", Froman said.
China's commerce ministry said on Thursday it will "try all methods" to stabilise trade in what it sees as a challenging and complicated trade outlook this year.
Supporting the move have been both domestic aluminum producers and union employees. China now produces more than half of the world's aluminum. Heidi Brock, president and CEO of the Aluminum Association, notes, "The Aluminum Association will review in detail the consultation request filed by the United States at the WTO". "The resulting excess capacity has caused prices to collapse in product line after product line, driving Western producers that must earn a return on their capital out of business". "The filing is the result of a cooperative effort initiated more than one year ago by the USW and Century Aluminum with the USTR to address global overcapacity in the aluminum sector", says USW International President Leo Gerard. The association has sent its trade action plan, which calls for addressing Chinese subsidies and other actions, to the incoming Trump administration.