Business News

CCTV Script 28/02/18

— This is the script of CNBC's news report for China's CCTV on February 28, Wednesday.

The U.S. Commerce Department slapped stiff duties on aluminum foil from China, which valued at nearly 400 million USD a year, concluding that the country's producers are receiving unfair subsidies and dumping the product in the U.S.

According to the statement of the Commerce Department, the U.S. would impose duties from 48.64 percent to 106.09 percent on Chinese aluminum foil for selling the product in the U.S. below fair market value, while the Trump administration also set duties of 17.14 percent to 80.97 percent for the unfair subsidies that the U.S. has concluded Chinese producers receive.

Therefore, a combination of both duties could add up to more than 186% of new tarrifs to China's aluminum foil producers.

U.S. imports of aluminum foil from China were an estimated $389 million in 2016, according to Commerce.

U.S. producers of aluminum foil have been exerting pressure for protections over what they say is unfair foreign competition and asking for tarrifs on China's imports.

However, spokesperson for the Chinese metals industry said the aluminum market in both countries has been shaped by independent investment decisions by companies, market demand and shifts in supply dynamics.

Chinese producers and some of their customers argued at the hearing that U.S. foil producers were not being injured and that U.S. producers were incapable of producing the thinnest gauges of foil used in food and medical products packaging. They also said U.S. producers were ceding the market to invest instead in higher-margin aluminum products such as those used in automotive production.

The ruling by Commerce may add to tensions between the U.S. and China, which has rejected that it gives its aluminum producers an unfair advantage.

Now, in pursuit of tougher trade rules, President Donald Trump is considering a range of recommendations to curb steel and aluminum imports after the Commerce Department found they threaten national security. The president has until mid-April to mak his decision on potential actions, which could include imposing tariffs and quotas on the metals.

[Leland Miller, CEO, China Beige Book International] "Section 232 is very controversial, even inside the White House. So you are probably going to see some reaction, you may not see the full-on reaction, there are however, other things on the road, they could be more China-specific, you could see those as well."

"The White House hasnt decided what to do, President Trump hasnt decided what to do, but you will see action on that. Section 232 is actually the start, not the end of this tarrif talk."

During the first two months of this year, the US Department of Commerce has already initiated antidumping and countervailing investigations towards four categories of Chinese exports, including plastic decorative ribbon, rubber band and large-diameter welded pipe.

The issue now goes before the U.S. International Trade Commission, which is expected to have the final say on the injury claims in a vote scheduled for March 15.

Meanwhile, all these come as top Chinese adviser, Liu He, is expected in Washington for discussions over the two nations' trading and economic relationship.

CNBC's Qian Chen, reporting from Singapore.