The Biden administration has introduced new tariffs on Armenia's largest export to the United States.
Last month, the Department of Commerce made a preliminary determination that Armenian aluminum foil is being sold "at less than fair value" in the U.S. - "dumped," in industry jargon. Until a final decision is made in the fall, Armenian foil exporters must pay U.S. Customs a cash deposit equivalent to 188.84 percent of the product value.
Aluminum foil accounts for almost half of Armenian exports to the U.S., according to UN trade data. It was worth more than $33 million in 2020. The foil is manufactured by a plant in Yerevan known as Armenal, which is owned by Russian aluminum giant Rusal.
The Commerce determination is based on a complaint brought last year by an industry group arguing that aluminum foil manufacturers in Armenia and four other countries had "injured U.S. producers" with "aggressively low-priced imports."
In its September filing, the Aluminum Association told Commerce that after Washington imposed anti-dumping enforcement actions against China in 2018, Armenia, Brazil, Oman, Russia and Turkey quickly moved into the American market with aluminum below fair market value.
"Between 2017 and 2019, imports from the five subject countries increased by 110 percent to more than 210 million pounds," the Aluminum Association said in September.
Armenia faces the stiffest penalty of the five, said the U.S. International Trade Commission, at the 188.84 percent rate. When a final decision is made, the rate could change: "If the final rate is different or if an order is not imposed, cash deposits will be refunded or changed as appropriate," a Commerce official told Eurasianet.
The Armenian National Committee of America, a prominent lobby in Washington, assailed the "counter-productive proposal" in a June 10 press release, arguing instead for closer management of bilateral trade.
"Armenal is a major taxpayer that contributes meaningfully to Armenia's budget, directly employs over 700 skilled workers in the Arabkir region, and indirectly supports the livelihoods of thousands of families across Armenia," ANCA said.
The timing could not be worse for Armenia, where the economy has been walloped by the pandemic. Output fell 7.4 percent last year, according to government figures. With the ongoing political crisis and an unresolved conflict on its eastern border, the IMF expects a painfully slow recovery.
**Updated on June 10 to include a response from the Commerce Department.