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Flexible Packaging

Flexible Packaging Makers Vexed by DOC’s Aluminum Foil Inquiries

Image courtesy of Alexandr Kolosov/Getty Images GettyImages-Aluminum-Foil-Rolls-Alexandr-Kolosov1151763728-1540x800.png
Flexible packaging manufacturers are wary of a US government investigation into aluminum foil imports from South Korea and Thailand.

The flexible packaging industry is speaking out against a US Department of Commerce (DOC) self-initiated investigation into aluminum imports from South Korea and Thailand, specifically aluminum foil used to manufacture flexible packaging.

DOC has been conducting circumvention inquiries to determine whether aluminum foil products assembled and or completed in South Korea and Thailand are circumventing US antidumping duty (AD) and countervailing duty (CVD) orders against aluminum foil products manufactured in China.

The agency announced its circumvention inquiries in the Federal Register in July 2022 and intends to issue its final determinations in May 2023. If DOC issues affirmative determinations, the targeted imports could become subject to antidumping and countervailing duties, driving up materials costs for US flexible-packaging manufacturers.

The imports in question are Korean and Thai aluminum foil products that incorporate aluminum foil from China that has “a thickness of 0.2 mm or less, in reels exceeding 25 pounds, regardless of width,” as described in the China-focused AD/CVD orders from 2017.

Excluded from these orders is “aluminum foil that is backed with paper, paperboard, plastics, or similar backing materials on one side or both sides of the aluminum foil, as well as etched capacitor foil and aluminum foil that is cut to shape.”

The Flexible Packaging Association (FPA) has come out against DOC’s circumvention inquiries, stating that they threaten flexible-packaging manufacturers with duties on aluminum foil needed to make food, beverage, pharmaceutical, nutraceutical, and medical device packaging.

Applications for foil-containing flexible packaging include yogurt, spices, juices, pet food, candy, over-the-counter drugs, supplements, COVID-19 test kits, prefilled syringes, absorbable sutures, and surgery kits.

Additional applications include packaging for hospital, university, and retail foodservice and for Meals, Ready-to-Eat (MREs), for the US military. The foil layer provides sterility and shelf-stability, creating a barrier to bacteria, odor, sunlight, and contamination.

According to the FPA, the foil used in such packaging applications is not manufactured in the US in the quantity/quality required; thus, flexible-packaging manufacturers must import it.

DOC’s circumvention inquiries are the latest in the saga of US aluminum duties and tariffs. In 2017, the US government-imposed duties on aluminum products coming from China. The following year, additional worldwide tariffs were imposed on aluminum products under Section 232 of the Trade Expansion Act.

Apparently acknowledging US manufacturers’ need to import certain aluminum products because of scarce domestic supply, DOC granted hundreds of exemptions from the Section 232 tariffs.

However, the FPA warns that the same exclusionary process does not apply to the initial duties on Chinese aluminum foil and would not apply to duties on Thai and Korean foil.

TAGS: Business
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