The U.S. Commerce Department could decide this week whether to launch a groundbreaking investigation into charges that China is subsidizing exports of an aluminum product by undervaluing its currency, Reuters cited a government official as saying today. In a case that could further strain U.S.-China trade ties, U.S. producers of molded "aluminum extrusions" used by the automobile and construction industries filed a petition recently asking for steep duties on imports from China. The petition's many complaints include a charge that China subsidizes exports of aluminum extrusions by undervaluing its currency; it asks the Commerce Department to impose countervailing duties to offset that. The Commerce Department has declined to investigate similar currency complaints in 10 previous cases covering a variety of manufactured products. But industry groups have continued to include the charge in their petitions, arguing that Beijing gives exporters a subsidy by undervaluing its currency. China, which defends its currency practices as an internal matter, would likely be upset by a formal Commerce Department decision to investigate whether its exchange-rate actions constitute a countervailable subsidy. In recent weeks, the Treasury Department delayed a decision on whether China was "manipulating" its currency for an unfair trade advantage, in part to give Beijing more time to revalue its currency without being hit with that label. Tim Truman, a spokesman for the Commerce Department's International Trade Administration, said he couldn't comment on specific details of the aluminum extrusion case. "But we will be announcing our initiation decision on the petition as a whole" on Wednesday, Truman said.
