Washington: The Obama administration on Thursday launched a new complaint against Chinese aluminium subsidies at the World Trade Organisation, accusing Beijing of artificially expanding its global market share through cheap state-directed loans and subsidised energy.
The complaint, which seeks consultations with Beijing over the matter, likely will add to rising trade tensions between the world’s two largest economies as President-elect Donald Trump prepares to take office next week with pledges to reduce US trade deficits with China as a top priority.
The US. Trade Representative’s office said the complaint claims that China’s actions in the aluminium sector violate WTO rules prohibiting subsidies that cause “serious prejudice” to other members of the trade body.
The complaint argues that “artificially cheap” state-directed loans and coal, electricity and alumina for the Chinese aluminium sector causes such prejudice by undercutting global prices and artificially expanding China’s market share.
“China gives its aluminium industry an unfair advantage through underpriced loans and other illegal government subsidies,” President Barack Obama said in a statement accompanying the announcement.
Global glut
“These kinds of policies have disadvantaged American manufacturers and contributed to the global glut in aluminium, steel and other sectors,” Obama said. “We’re taking action to protect the workers — at home and around the world — who are hurt every day by these policies. That’s what we’ve done since day one.” US. Trade Representative’s office said China’s capacity to produce aluminium more than quadrupled between 2007 and 2015, while global prices fell approximately 46 per cent. China now produces more than half of the world’s aluminium.
At the same time, US primary aluminium production decreased by 37 per cent, even though overall US consumption of the metal increased. Nine of 14 US aluminium smelters have halted production since 2011, with only one operating at full capacity, the US trade office said.
The pending complaint follows an October request for a WTO case against China’s aluminium trade practices by six US senators concerned about 15,000 lost jobs in the sector in recent years.
