The United States has filed a complaint with the World Trade Organization to highlight the unfair practices of China that has led to a crippling effect in the aluminum and steel sector in the country. China’s unacceptable practices have impacted many countries around the world, particularly the industrially advanced economies that have flourishing steel and aluminum sectors.
The outgoing Obama administration alleged in the trade complaint that China was dumping aluminum across the global market at prices so low that they are not only unrealistic but also artificial. Not only is this practice immoral but also against fair competition and can destroy sectors in many countries including the United States.
In the official complaint to the World Trade Organization, the US has brought to light the illegal subsidies and artificially cheap loans that China has been showering on its aluminum industry and which has led to an uncontrolled boom in the largest Asian economy.
Former President Barack Obama had said that China gave its domestic aluminum industry an undeserving and unfair advantage with underpriced loans and strange government subsidies that would be deemed illegal in any fair trade practice. He had also stated that such policies had put American manufacturers at a distance and lead to a global glut in steel and aluminum sectors among others. Michael Froman, US Trade Representative, has taken this forward in the complaint. Recently, Intalco near Ferndale was about to shut down due to the malpractices of China. While the aluminum smelter of Intalco may have been saved from shutting down with renegotiated power deal and capital inflow for the workforce, there can be more adverse effects if China continues with its policies and practices.
This is not the first time the US has had to file a complaint against China with the World Trade Organization. There have been fifteen such complaints in the past, highlighting the need for various types of trade enforcement challenges. It is expected that the complaint will be followed up and some tenable action would be taken, despite the transition of power from the Obama administration to the Trump administration. President Donald Trump had spoken about closing the trade gap US has with China and it was one of the priorities he had set for his administration. It remains to be seen how he follows up with these measures. China is already infamous for being a currency manipulator and Trump has called them out on several occasions.