The latest salvo has been launched in escalating trade tensions between the world’s two largest economies, the US and China.

The US Department of Commerce has announced proposed duties on aluminium foil imports from China, which are being sold in the US at cheap prices to the detriment of local producers, trade officials say.

The US claims Chinese producers are flooding the US market with low priced aluminium foil subsidised by Beijing.

Duties on dumping and countervailing Chinese products ranging from 48.6% to 106% and anti-subsidy rates of 17.14% to 80.9% would be applied to a slew of Chinese firms, the US Department of Commerce said in a statement.

Meanwhile, China has launched a probe into US exports of sorghum, a crop used to feed livestock, leaving US soybean farmers fearing their $14 billion annual exports to China could be next.

What was said:

US commerce secretary Wilbur Ross said:

This Administration is committed to trade that is fair and reciprocal, and we will not allow American workers and businesses to be harmed by unfair imports.

China responded to the decision with “strong dissatisfaction” and accused Washington of jumping to conclusions “without any evidence”.

Beijing promised to take the necessary steps to protect their legal trade rights under the World Trade Organisation, which they joined in 2001.

China’s Ministry of Commerce (Mofcom) said in a statement:

The US has disregarded the WTO rules and seriously damaged the interests of China’s aluminum foil exporters.

The new tariffs will take effect after the International Trade Commission (ITC), will announce whether Chinese imports injure US producers in the results of an injury case, due to be announced on 15 March. If imposed, the tariffs will be applied for five years.

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The intervention came after US aluminium foil producers accused China of importing aluminium into the US for sale at unfairly low prices, subsidised by the Chinese government, in January.

The mounting US China trade war:

The latest turn comes amid escalating trade tensions following US President Donald Trump’s decision to impose 30% tariffs on solar panel imports from China, in what was perceived as the opening salvo in a looming trade war.

Three top economic advisers from the Trump administration met a trusted adviser to China’s President Xi Jinping, Liu He, at the White House yesterday, in an effort to diffuse mounting tensions.

The US Commerce department listed the value of aluminium foil imports from China at an estimated $389 million, in 2016.

Why it matters:

In January, US aluminium foil producers complained to the ITC that the aluminium industry had been ruined by Chinese imports and needed anti-dumping duties to rehabilitate itself.

The Aluminum Association associate president Heidi Brock said:

The Aluminum Association and its foil-producing members are extremely pleased with the Commerce Department’s final determinations.

US aluminium foil producers are among the most competitive producers in the world, but they cannot compete against products that are sold at unfairly low prices and subsidised by the Government of China.

The new margins

Under the new sanctions, anti-dumping margins will be set at 106% for Hangzhou Dingsheng Import & Export Co Ltd and related companies, 48.64% for Jiangsu Zhongji Lamination Materials Stock, 89.5% for 14 other companies and 106.1% for all other Chinese producers the Commerce Department announced.

Countervailing duty margins were marked at 17.1% for Jiangsu Zhongji, 20% for Dingsheng, 81% for Loften Aluminum (Hong Kong) Limited, Manakin Industries LLC and Suzhou Manakin Aluminum Processing Technology, and 18.6% for all other producers in China, it said.