BEIJING (Reuters) - U.S. aluminum foil producers have filed petitions with their government accusing Chinese manufacturers of dumping the product in the United States, the first such case since the inauguration of U.S. President Donald Trump.
The move comes a week before Rex Tillerson makes his maiden trip to China as U.S. Secretary of State, amid festering tensions between the world's top two economies over aluminum and steel trade.
Responding to the move, China's Commerce Ministry said on Friday that the United States should act with caution.
"China hopes the U.S.-side will not readily resort to using trade rescue measures," it said.
The U.S Aluminum Association on Thursday filed anti-dumping and countervailing duty petitions charging that unfairly traded Chinese imports of certain kinds of aluminum foil, used to make packaging for everything from crisps to yoghurts, are causing "material injury" to the domestic industry.
It said its latest action was part of the industry's broad trade strategy to address overcapacity in top producer China. China produces over half the world's aluminum.
The U.S. Commerce Department has 20 days to decide whether to launch a probe and the U.S. International Trade Commission will reach a preliminary determination within 45 days. A final ruling is expected in the first quarter of 2018.
Trump has pledged to reduce U.S. trade deficits with China as a top priority and to impose punitive tariffs on Chinese goods coming into the United States.
"(The move) reflects both the intensive injury being suffered by U.S. aluminum foil producers and also our commitment to ensuring that trade laws are enforced to create a level playing field for domestic producers," said Heidi Brock, President and Chief Executive of the Aluminum Association.
Top Chinese foil producers Dingsheng Aluminum Group, Xiashun Holdings Ltd, Jiangsu Dingsheng New Energy Materials Co Ltd and SNTO Group were not available for comment.
China exported 1.1 million tonnes of foil last year, up 13 percent from 2015 and more than double levels at the turn of the decade.
The world's top rolled products maker, Novelis, exited the U.S. commodity foil and wrap business, alongside other smaller companies in recent years, targeting higher-margin markets like automotives.
This is the latest U.S. complaint that China is exporting excess capacity abroad.
Just before leaving office, the Obama administration launched a new complaint against Chinese aluminum subsidies at the World Trade Organization, accusing Beijing of artificially expanding its global market share with cheap state-directed loans and subsidized energy.
Washington increased duties on aluminum extrusions in 2015.
(Reporting by Josephine Mason and Judy Hua; additional reporting by Ruby Lian; Editing by Richard Pullin and Joseph Radford)