Commerce Launches Circumvention Inquiries on Aluminum Containers Completed in Thailand and Vietnam

The U.S. Department of Commerce has officially initiated country-wide circumvention inquiries to determine whether disposable aluminum containers, pans, trays, and lids completed in Thailand and Vietnam using Chinese-origin aluminum foil are evading the existing antidumping (AD) and countervailing duty (CVD) orders on aluminum containers from China.

This action follows a petition filed by the Aluminum Foil Containers Manufacturers Association (AFCMA) and its member companies, who alleged that Chinese producers have been shipping aluminum foil to Thailand and Vietnam for minimal processing before exporting finished aluminum containers to the United States. AFCMA claims that this practice allows Chinese aluminum products to avoid the AD/CVD duties that would otherwise apply if the products were shipped directly from China.

What Is at Issue?

The Commerce Department’s circumvention inquiry focuses on whether the production and assembly operations in Thailand and Vietnam are “minor or insignificant” under U.S. trade law. If Commerce determines that the processing in these third countries is minimal and that the core material—Chinese aluminum foil—comprises a significant portion of the product’s value, it may conclude that these imports are effectively Chinese products in disguise and should be covered by the original AD/CVD orders on Chinese aluminum containers.

Under section 781(b) of the Tariff Act of 1930, Commerce considers factors such as:

• The level of investment and research in the third countries.
• The nature, extent, and complexity of the production in the foreign country.
• The value added by the processing done in the third countries.
• Patterns of trade, including sourcing of materials.
• Affiliations between Chinese suppliers and Thai/Vietnamese processors.
• Whether or not the value of processing performed in the foreign country represents a small proportion of the value of the merchandise imported into the United States.
• Whether imports of the merchandise into the foreign country have increased after the initiation of the investigation that resulted in the issuance of such order.

If Commerce finds that the completion or assembly in Thailand or Vietnam is minor, the agency may expand the scope of the original China-focused duties to cover these imports as well.

How the Inquiry Will Proceed

Commerce will now request data from U.S. Customs and Border Protection (CBP) to identify major exporters from Thailand and Vietnam. Selected respondents will be required to provide detailed production, sourcing, and cost information. Companies that fail to fully respond may face adverse inferences, which could lead to higher duty rates.

While the inquiries are ongoing, Commerce will continue the suspension of liquidation for entries already subject to AD/CVD duties under the existing orders. If preliminary or final affirmative determinations are issued, Commerce could instruct CBP to:

• Extend the suspension of liquidation for previously entered shipments.
• Begin suspending liquidation for additional unliquidated entries, potentially even those entered prior to the initiation of the inquiry.

Timeline

Commerce expects to issue a preliminary determination within 150 days of the initiation notice’s publication in the Federal Register, and a final determination within 300 days, unless the inquiry is extended or rescinded.

If you have questions about how this policy could affect your importing activities or customs compliance, please contact our office for assistance. As new tariff regulations continue to evolve, navigating these changes requires experienced legal counsel. At Liang + Mooney, PLLC, our seasoned tariff lawyers can answer your questions and concerns with sophisticated legal solutions.  If you seek strategic counsel and insight into how these changes could affect your operations, we invite you to contact us to schedule a consultation.