China Puts Duties On Imported Steel From US And Russia
By: Ainsley Brown
In what is clearly a sign of the continuing rise of tensions in global trade relations, China last week imposed duties US and Russian steel. The target of the duties is flat rolled steel used in the electric power sector.
According to the Chinese the steel products were being dumped – that is being sold at below the cost of production – in the Chinese market by companies from both countries. Additionally, the Chinese government also alleges, in the case of the US companies, that the dumping was also a result of the Buy America provisions of the US stimulus package.
Beijing’s argument is that US steel companies benefiting from higher domestic prices, the result of Buy America, can afford to export at a lower price (i.e. dump) in China. The Chinese are in effect saying that Buy America is a subsidy that violates the WTO’s subsidies provisions – well as far as flat rolled steel is concerned.
It is interesting to note that this was the first time that China has investigated and imposed (countervailing) duties in connection with subsidies on imported goods. While these duties – anti-dumping and countervailing – are expected to affect less than 1% of the Chinese steel market, they reflect the increasing political sensitivity that steel has in Chinese trade relations. These duties are no doubt a reaction to the Obama administration imposing duties on Chinese steel pipes and its investigation of cars and auto parts coming from China.
