State-financed Chinese dumping undermines Europe’s trade defence and seriously harms its ability to protect jobs, innovative businesses, and entire industrial value chains.
For this reason, we applaud the Commission for imposing definitive anti-dumping rules on Chinese aluminium extrusions and flat rolled products.
A 2021 OECD report examined state subsidies to 32 companies representing 70% of the global aluminium market. The study found that Chinese firms received state support ranging from 4% to 7% of annual revenues compared to similar support representing 0.2% of annual revenues of non-Chinese firms. These subsidies unfairly benefit Chinese production at the expense of production in Europe. They also weaken domestic supply chains for many products vital to Europe’s strategic autonomy.
The harmful effects of distortive subsidies must be tackled on a European and global level.
European Aluminium supports the goal of Free Trade Agreements (FTAs) to reduce unnecessary trade barriers. However, when it comes to aluminium (HS Chapter 76), tariff removal would put the entire European aluminium industry at risk, from smelters to recyclers.
That’s why the European aluminium industry calls for a sectorial approach when negotiating Free Trade Agreements with rich aluminium producers, e.g. with India, Indonesia, Malaysia, and the UAE.
Aluminium is a strategic raw material under the EU Critical Raw Materials Act and is essential for the green transition, transport, construction, and defence. Opening the EU market to aluminium produced under unfair market conditions, weaker labour and environmental rules, and with far higher carbon emissions would undermine Europe’s sustainability goals and strategic autonomy.
The existing World Trade Organisation (WTO) rules are inadequate to remedy the scale and scope of state intervention in the global aluminium market. Most WTO rules date back to 1995, when the organisation was established, and before China was the dominant player it is now. The rules should be redesigned to address global market distortions resulting from subsidies. The WTO should also provide tools to assess the impact of government support throughout the whole value chain and better account for the influence of state actors, given the dual role of some State-Owned Enterprises as both recipients and providers of support.
Levelling the playing field for European producers
European Aluminium is fully in favour of free trade as long as it is fair. Unfair trade practices are a real threat to our existence. Over the past decades, China has been increasingly distorting our market with subsidised and underpriced products, leading to European production losses and broader trade challenges globally. Moreover, the influx of Chinese imports jeopardises our sustainability objectives, as primary aluminium produced in China has a carbon footprint that is almost three times higher than European primary aluminium (6.6 kg of CO2 per kg of aluminium produced versus a Chinese average of 20 kg of CO2).
To compete in a fair market that helps the industry advance for the better, we need EU policymakers to understand our urgency. Europe needs effective trade defence instruments, a robust screening mechanism, and free trade agreements that consider climate change policies conditional.