The following article appeared in the Financial Times, but it is probably running on news wires around the business world.
The US launched a probe into Chinese exports of aluminium products on Wednesday night but postponed a decision on whether to include the country’s exchange rate policy in its inquiry.
The investigation, announced by the commerce department, will unfold over the next few months, with an initial determination scheduled for May 17. It threatens to reignite tensions between the US and China over the value of the renminbi after a period of relative calm between the two countries on the issue.
The US said the probe would centre on aluminium “extrusions”, which are used in the construction and car industries to make components of windows and doors, as well as furniture and solar panels.
Investigators at the International Trade Commission, an independent agency, and the commerce department will be conducting an anti-dumping inquiry, looking into whether Chinese exports were sold below their value, as well as a countervailing duty inquiry, examining whether the exports were benefiting from unfair government subsidies.
If the ITC finds that American producers have been damaged, the US could impose stiff penalties on the products.
Companies pressing for the inquiry, including a number of US steel and aluminium producers, have urged Washington to include the undervaluation of the renminbi in its calculations, which it has resisted in similar cases.
But the commerce department on Wednesday decided not to bring currency initially into the aluminium case, although it did not rule it out as the investigation progresses.
“The department is taking additional time to carefully examine the currency manipulation allegation in this petition. The department’s decision will be made at a later date,” it said.
“Today’s announcement is solely based on whether or not the petitions met the statutory requirements for initiation under US trade laws.”
The initial determination by the ITC in May will be followed by an initial determination by the commerce department in late June.
The value of Chinese exports of aluminium extrusions increased sharply between 2007 and 2009, rising from $369m to $514m, as the volume of goods rose from 101,000 metric tons to 192,000 metric tons.
A period of relative peace over the value of the renminbi was ushered in by a US decision this month to delay a report that might have labelled China a currency “manipulator” before a bilateral meeting between Barack Obama and Hu Jintao, his Chinese counterpart.