WASHINGTON: US authorities are investigating whether companies tied to a Chinese billionaire evaded punitive tariffs on aluminum imports, according to a media report Wednesday.
Agents from the Department of Homeland Security recently questioned US companies and former employees tied to Liu Zhongtian, founder of China Zhongwang Holdings Ltd, The Wall Street Journal reported, citing knowledgeable sources.
One suspicion is that aluminum from China Zhongwang is being imported into the United States in the form of pallets -- which carry a low tariff -- with the intention of melting them back down once in the country, according to the Journal.
Zhongwang aluminum products made in China are subject to import tariffs of as much as 374 percent because the US has found they are heavily subsidized.
The investigation is examining possible criminal and civil violations that may include smuggling, conspiracy and wire fraud.
China Zhongwang, which describes itself as Asia's largest producer of extruded aluminum products, has denied wrongdoing, according to The Journal.
A Homeland Security spokesperson told AFP the agency cannot confirm the existence of any investigation into the matter.
Companies under scrutiny by Homeland Security include New Jersey-based Aluminum Shapes and Peng Cheng Aluminum Enterprise Inc in Walnut, California, according to the newspaper report.
The Commerce Department said in March it was investigating allegations China Zhongwang was transshipping aluminum to the United States via Mexico, also in a bid to avoid US import duties.
The government determined in 2010 that China Zhongwang benefited from illegal subsidies and was dumping its products on the US market.
The Commerce Department also is investigating whether Aluminum Shapes LLC imported aluminum pallets -- which are subject to far lower tariffs -- to be melted down for raw material, according to The Journal report. Aluminum Shapes has denied wrongdoing.
The latest investigation comes as US industry has campaigned against perceived trade violations by China as the global aluminum industry struggles with massive overcapacity.
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