(Adds China comment in paras 5,6 and 12)
WASHINGTON, Aug 8 (Reuters) - The U.S. Commerce Department said on Tuesday it made a preliminary finding that imports of aluminum foil from China are subsidized, and it imposed countervailing duties ranging from 16.56 percent to 80.97 percent.
U.S. aluminum foil producers had filed petitions with the U.S. government accusing Chinese producers of receiving subsidies and of “dumping” the product in the United States market, the first such case since President Donald Trump took office.
In 2016, imports of aluminum foil from China were valued at an estimated $389 million, Commerce Department figures show.
U.S. Commerce Secretary Wilbur Ross said in a statement announcing the decision that the Trump administration “will not stand idly by as harmful trade practices from foreign nations attempt to take advantage of our essential industries, workers and businesses.”
Wen Xianjun, the vice president of the China NonFerrous Metals Industry Association leading the antidumping negotiations for China, said the move would not only harm Chinese companies, but also U.S. downstream firms, especially in the soft packaging industry, where unemployment would rise as they became less competitive.
“We do not wish to fight a trade war, but the Chinese aluminum industry is also not afraid of a trade war,” he said on Wechat, a instant messaging service.
The Aluminum Association, a U.S. industry lobby group, applauded the move.
“This is an important step to begin restoring a level playing field for U.S. aluminum foil production, an industry that supports more than 20,000 direct, indirect and induced American jobs and accounts for $6.8 billion in economic activity,” Association President Heidi Brock said in a statement.
“U.S. aluminum foil producers are among the most competitive producers in the world, but they cannot compete against products that are subsidized by the Chinese government and sold at unfairly low prices,” it said.
The Commerce Department said it calculated preliminary subsidy rates of 28.33 percent for Dingsheng Aluminum Industries (Hong Kong) Trading Co Ltd and 16.56 percent for Jiangsu Zhongji Lamination Materials Co Ltd, the only two companies that participated in the probe.
Three other China-based companies that failed to provide requested information or were found to give incorrect information about their status as exporters faced higher duties, it said. Loften Aluminum (Hong Kong) Ltd, Manakin Industries LLC and Suzhou Manakin Aluminum Processing Technology Co Ltd were all slapped with 80.97 percent anti-subsidy duties.
Most of China’s aluminum is used in the domestic market, which still has a lot of potential to grow, China’s Wen said, adding that the preliminary tariffs were “within expectations”.
The next step in the U.S. trade action is a preliminary anti-dumping determination by the Commerce Department expected on Oct. 5.
The case is separate from the department’s Aluminum 232 investigation launched in April into whether China’s aluminum overcapacity, dumping, illegal subsidies and other factors threaten U.S. economic security and military preparedness. (Reporting by Eric Walsh in WASHINGTON DC; additional reporting Tom Daly in BEIJING; editing by Eric Beech and Richard Pullin)