Final Decision in August After On-Site Inspection
Six domestic aluminum companies, including Lotte Aluminum, have received a preliminary determination from the U.S. government alleging tariff circumvention on aluminum foil products. These companies have been processing Chinese aluminum foil domestically and exporting it to the U.S. Due to this preliminary determination, they will be subject to additional tariffs (anti-dumping and countervailing duties) equivalent to the dumping margin. The domestic industry plans to actively respond to ensure no disruption in exports to the U.S. until the final ruling.
On the 4th, Lotte Aluminum announced that on the 17th of last month, it received a preliminary determination from the U.S. Department of Commerce imposing 'circumvention export tariffs' for using Chinese products subject to anti-dumping and countervailing duties. Subsequently, Dongil Aluminum, Dongwon Systems, Iljin Altech, Korea Aluminum, Sama Aluminum, and three Thai companies also received preliminary tariff imposition determinations for the same reason.
Tariffs will be imposed even before the final ruling in August this year. The tariff rate is known to be around 110%. The final ruling will be announced on August 2 after on-site verification in April and May.
Since 2018, the U.S. has imposed anti-dumping and countervailing duties on general alloy aluminum sheets manufactured in China. It judged that Chinese companies were selling aluminum sheets at prices lower than the U.S. fair market price due to unfair government subsidies.
Aluminum foil is used in battery manufacturing and other applications. Among Korean companies, LG Energy Solution is known to have imported some products from these companies.
The aluminum industry has expressed its intention to actively respond until the final ruling. Since July last year, the U.S. government has been investigating whether Korean and Thai companies have circumvented tariffs on Chinese aluminum exports.
Companies including Lotte Aluminum have prepared alternative supply chains, anticipating a high likelihood of circumvention export tariffs being imposed. One company has stopped using Chinese products entirely since this year. A Lotte Aluminum official said, "Chinese products only pose a problem when supplying to the U.S. We have prepared by mergers and acquisitions (M&A) with domestic aluminum strip manufacturers, so we can sufficiently respond with domestic products."
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