GENEVA: Indonesia is planning to impose a 22% ‘safeguard’ tariff on imports of aluminium foil, it told the World Trade Organization in a filing on Thursday, citing a surge in imports due to surplus flows of the commodity coming from China.
Indonesia’s national Safeguards Committee began examining the case for a tariff to protect its domestic producers of aluminium foil last October.
Indonesia told the WTO that the committee had recommended imposing the tariff because Chinese exports of aluminium foil had been diverted to Indonesia because of measures taken by Turkey, the European Union and India.
China had also increased production of aluminium foil in the past three years, and its domestic market had not absorbed all the extra output.
The global aluminium market has also been affected by a 10% tariff imposed by US President Donald Trump last March, but Indonesia’s statement to the WTO did not mention the impact of the US tariff.
The proposed tariff, allowed under WTO rules as a temporary measure to shield an industry that is under threat from a sudden, unforeseen surge in imports, would fall to 18% in the second year and 14% in the third year.
Benchmark aluminium prices ended 2018 down 18.6% on bets the US sanctions on Russian producer Rusal would be lifted and on US-China trade tensions.