US launches trade case against China over aluminum subsidies

The Obama administration on Thursday launched a complaint against China over subsidies provided to aluminum producers it says has created excess supply and hurt U.S. workers.

The United States filed the case at the World Trade Organization (WTO) arguing that artificially cheap bank loans and low-priced inputs for Chinese aluminum contribute to excess capacity that undercuts American workers and businesses.

“Today’s action follows significant engagement by this administration on excess capacity and demonstrates our commitment to hold China to its trade obligations,” said U.S. Trade Representative Michael Froman.

{mosads}”Our record of tough enforcement with China speaks for itself: When China cheats, we’ve been right there, securing recourse for our workers, farmers, ranchers and businesses,” Froman said.  

President Obama said in a statement that China’s policies “have disadvantaged American manufacturers and contributed to the global glut in aluminum, steel and other sectors.”

“We’re taking action to protect the workers — at home and around the world — who are hurt every day by these policies,” the president said.

“That’s what we’ve done since day one. From enhancing fair trade laws and expanding enforcement resources to preventing unfair currency practices and safeguarding intellectual property, our record of forceful and effective trade enforcement on behalf of American businesses and workers has protected American jobs.”

The latest challenge is the 16th trade enforcement challenge the Obama administration has launched at the WTO against China, and the 25th overall during the two terms of President Obama. The United States has won all of the cases decided so far.

Ohio Sens. Sherrodd Brown (D) and Rob Portman (R) sent a letter to the Obama administration in October urging the White House to pursue the aluminum case.

Brown and Portman say that 15,000 U.S. workers in aluminum production have lost their jobs in the last decade, including 1,500 in the past year.

“Thousands have lost jobs because of unfairly subsidized aluminum from China that has flooded the market and led to overcapacity, and it’s past time we get tough on these violations before more American workers suffer,” Brown said.

Portman said he is “pleased that the administration followed my and Sen. Brown’s advice and is standing up for U.S. aluminum producers at the WTO.”

“Unfortunately, when competitors like China cheat by subsidizing domestic industry, it leads to a flood of unfair and illegal imports that hurt Ohio companies that play by the rules,” he said. 

White House Deputy National Security Adviser for International Economics Wally Adeyemo said that the Obama administration over the past eight years has increased its enforcement against countries like China that violate international trade rules. 

“We have upgraded our toolkit and resources to address unfair imports that violate our trade laws, built an international coalition to address global overcapacity that hurts American workers, and worked vigorously to level the playing field by ensuring that our trading partners protect workers’ rights and the environment,” Adeyemo said. 

Lawmakers on Capitol Hill applauded the Obama administration’s decision and urged President-elect Donald Trump to further pursue the matter. 

Senate Finance Committee ranking member Ron Wyden (D-Ore.) said “China has used every play in the book to give its aluminum producers an unfair advantage, from below-market loans to subsidized electricity, and America’s aluminum industry has been decimated as a result.”

“Now it is up to the Trump administration to follow through aggressively and deliver real results and real jobs for these hard-hit American communities,” he said. 

House Ways and Means Committee ranking member Richard Neal (D-Mass.) also backed the decision to file the case. 

“China’s heavy-handed industrial policies have been wreaking havoc on global markets for years,” Neal said. 

“At the same time, this case only addresses China’s trade-distorting subsidies, and the next administration will need to take further actions to address the other causes of China’s massive trade-distorting overcapacity problems,” he said.