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--Beijing Says It Will Protect Its Firms Against Price/Subsidy Inquiry
By William Bi
     BEIJING (MNI) - Could China and the United States -- the world's two
largest economies -- be headed for a near-term trade war? 
     The U.S. Commerce Department announced Tuesday that it would initiate on
its own accord an investigation into the pricing and subsidy support for imports
of aluminum sheeting made in China. 
     The Commerce Department announcement came only three weeks after U.S.
President Donald Trump met Chinese President Xi Jinping in Beijing, and a day
after North Korea tested another ballistic missile. After their first meeting in
Florida in March, Trump promised that China would get preferential trade
treatment if it helped the U.S. solve the North Korean crisis. 
     China reacted angrily to the Commerce Department move. 
     China will take "necessary measures" to safeguard the rights and interests
of Chinese enterprises, the Ministry of Commerce said Wednesday. China also
expressed its "strong dissatisfaction" over the move by the U.S., Wang Hejun,
director of the Bureau of Trade Relief Investigation, said in a statement on the
ministry's website.
     The U.S. anti-dumping and anti-subsidy charges were not based on input from
the domestic industry but initiated by the Commerce Department on its own,
something it hasn't done in 25 years, Wang noted. Imposing barriers on the
aluminum products trade will harm the interests of both countries, as the two
sides' aluminum industries are complementary, Wang argued.
     On Tuesday, the U.S. Commerce Department self-initiated an anti-dumping
investigation against Chinese imports of sheet aluminum under the Tariff Act of
1930. It was the first time since 1985 that the Commerce Department had taken up
an anti-dumping investigation without the affected industry requesting that it
do so. 
     In addition to investigating whether Chinese producers were dumping
aluminum sheeting in the U.S. at unfair prices, the Commerce Department
initiated a parallel investigation into whether Chinese producers are
benefitting from illegal subsidies from their government. 
     Analysts have warned that such unilateral trade action could start a
tit-for-tat trade war. 
     "President Trump made it clear from day one that unfair trade practices
will not be tolerated under this administration, and today we take one more step
in fulfilling that promise," U.S. Commerce Secretary Wilbur Ross said in a
statement announcing the trade actions. "We are self-initiating the first trade
case in over a quarter century, showing once again that we stand in constant
vigilance in support of free, fair, and reciprocal trade."
     The Commerce Department statement said it had started the investigations
"based on information indicating that the United States price of common alloy
sheet from China may be less than the normal value of such or similar
merchandise and that imports of common alloy sheet from China may be benefitting
from countervailable subsidies."
     "The Department also has evidence that imports of common alloy sheet from
China may be materially injuring, or threatening material injury to, the
domestic industry producing common alloy sheet in the United States," it said. 
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
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