The U.S. Commerce Department on Tuesday is expected to find that Chinese imports of aluminum extrusion have been illegally subsidized, harming the domestic industry and paving the way for countervailing duties to be imposed, The Wall Street Journal reports.

U.S. producers of aluminum extrusions claim that their Chinese competition has illegally gained a price advantage because of China’s undervalued currency, causing imports to increase dramatically, resulting in job loss in the domestic industry.

In 2007, China controlled just eight percent of the U.S. aluminum extrusion market, a share that jumped to 20 percent last year. Over that same time, prices of Chinese imports of aluminum extrusions have fallen 30 to 50 percent.

“Our industry is very competitive, with the best suppliers ultimately winning the business for all of the right reasons,” Duncan Crowdis, the President of Georgia’s Bonnell Aluminum, told Fabricating and Metal Working Magazine. “The domestic industry has no desire to create a protectionist barrier. However, the industry cannot compete with entities that are able to significantly under-price U.S. producers due to unfair trade practices such as dumping and subsidies from foreign governments. The industry simply wants the law to be enforced to ensure that it is competing on a level playing field.”

The $514 million industry is seeking to protect itself through the imposition of 33 percent countervailing duties on Chinese imports. In addition, the U.S. International Trade Commission is expected to levy antidumping duties against Chinese producers of aluminum imports in October.

Canada and Australia have filed similar cases against Chinese producers. Canada has levied antidumping duties and Australia is still in the investigation stages.

The case is very important for American manufacturers, who could soon have a way to deal with China’s currency manipulation. Previously, the Commerce Department rejected the claim that China’s undervalued currency amounted to an illegal subsidy because it was not targeted at one specific industry. However, it appears that the Commerce Department is prepared to allow claims to be filed due to currency manipulation.

That could add to the already large number of trade disputes between the U.S. and China that have bubbled to the surface since the Obama administration took office.

In the past year alone, trade disputes over tires, steel tubing, chicken, autos, paper, aluminum forms, nylon products and salt have arose. In addition, U.S. lawmakers and manufacturers have pressured the Obama administration to force China to let its currency appreciate.

According to China’s Commerce Ministry, the number of trade relief-cases brought against China by the U.S. increased 53 percent in 2009.

“If China won’t do the right thing and stop cheating on trade, we must make them do the right thing by bringing these trade actions,” United Steel Workers President Leo Gerard told Fabricating and Metal Working Magazine.

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