In the first anti-dumping case opened in the United Kingdom after leaving the European Union in 2020, the Trade Remedies Authority (TRA) found that Chinese aluminium extrusions have dumped to the UK market at prices below fair value. The TRA found that this dumping caused injury to UK producers.
The UK is not alone in dealing with Chinese dumping. The US, Canada, Australia and the EU already have anti-dumping duties on Chinese aluminium extrusions in place. However, the duties in those countries are much higher than the average 10.1% proposed by the TRA.
“It’s not just a few percentage points difference, it’s one-third of the US level. The duties will be so low it will simply be absorbed by the Chinese exporters,” Roger Ablett, managing director of extrusions at Hydro Aluminium UK told the Financial Times.
“The difference in duties is because the TRA, unlike investigators in other countries, does not accept that all markets in China are distorted. The UK is not in line with its OECD trading partners on China's economic system like the US who has defined China a non-market economy for purposes of U.S. Department of Commerce’s application of the US antidumping and countervailing duty laws. The result will be an ineffective trade remedy in the UK."
“The survival of the domestic aluminium industry depends on effective anti-dumping measures. If the aluminium products that can no longer be sold in the US and EU are dumped into the UK instead, this will effectively wipe out UK production completely, threatening thousands of jobs in the aluminium value chain," Ablett adds.
In a January 2019 report on the aluminium value chain, the OECD established that 70 billion USD in subsidies was given to 17 global aluminium companies in the period between 2013-17. 85% of those subsidies went to just five Chinese producers. These subsidies distort the whole aluminium market in China and finance Chinese dumping.
Ablett urges the TRA to maintain the final tariffs at least at the same level as the provisional duties which were introduced in May.
The impact would be not only on jobs in Britain. The climate would also suffer. Aluminium extrusions produced in the UK have a carbon footprint on average three times lower than those produced in China. Dependence on imports of Chinese aluminium means effectively importing CO2 emissions. This carbon leakage would be a perverse public policy outcome considering that aluminium is used in a number of applications necessary in the UK’s green transition: electric vehicles and batteries, solar panels, wind turbines and energy security infrastructure.
“The transition to net zero will require close collaboration between players in the value chain. We stand ready to support our industrial customers in developing innovations and supplying them with our low-carbon aluminium extrusions. We are not asking the government for any special treatment. We are only asking for a level playing field”, Ablett finishes.