China's Xi Jinping Photo: Pool photo / AP
Commerce Secretary Wilbur Ross has announced that the Commerce Department today "self-initiated" antidumping and countervailing duty investigations of aluminum imports from China, which Ross claims have been dumped and subsidized to the detriment of U.S. manufacturers, CNBC reported.
Why it matters: China and some US free traders will scream "trade war," but self-initiated AD/CVD cases, while rare, are still permitted (and governed) by World Trade Organization rules, and Ross promised them back in his confirmation hearings. So this move is far less controversial than the investigations into steel and aluminum imports earlier this year which were initiated on national security grounds. The Trump administration will nevertheless hold these investigations up as a fulfillment of Trump's "America First" promises to crack down on unfair trade, and China's complaints will probably help their public case.
Why "self-initiated" matters: Most of the time, these cases are adjudicated by the U.S. government following a U.S. industry petition claiming injury from a foreign nation's subsidies or a private company's dumping. By self-initiating, the U.S. will play both plaintiff and judge. This will understandably set off diplomatic and geopolitical alarms, but the cases will still follow standard procedures under U.S. law and WTO rules.
What's next: This kicks off a year-long process of fact-finding on Chinese dumping/subsidization and "material injury" to U.S. manufacturers. If the U.S. finds that Chinese companies have been selling dumped (sold at prices below fair value) or subsidized imports that have hurt the U.S. aluminum industry, the U.S. will impose duties on those imports.