Fight Time: EU to Slap 25% Duties on PRC Steel

♠ Posted by Emmanuel in ,, at 1/20/2009 06:28:00 AM
With folks like me prattling on and on about an impending US-China trade war, don't forget that there are many other disgruntled nations that have come up against the mighty Chinese export machine. Today's case in point is the EU. In late 2007, there were already rumblings about an impending EU sanction, with angry noises being made about China's pollution-intensive manufacturing methods. Fast-forward to early 2009 and we now appear to have impending EU duties on Chinese concrete rebar and the like. (My apologies for not bringing this news earlier.) From Reuters:
A key European Union trade panel voted in favour on Thursday of imposing temporary antidumping duties of 25 percent on imports of Chinese-made steel wire rods, EU sources familiar with the case said. "The vote was in favour of the duties," one source told Reuters on condition of anonymity.

European steel producers requested the additional tariffs on the rods, used among other things to reinforce tyres and concrete. They had complained that Chinese exporters enjoyed an unfair advantage because suspected subsidies in China's steel industry gave them cheap raw material. The duties -- which are likely further to damage already brittle trade and diplomatic ties between Brussels and Beijing -- will come into force next month and remain in place for six months.

The European Commission, which oversees EU trade policy, must then decide whether to propose "definitive duties" lasting at least five years. EU trade ministers must approve any such move for it to take effect. Trade disputes between Brussels and Beijing are on the rise since the EU's trade deficit with China has ballooned, hitting 160 billion euros ($210 billion) last year. In December, the EU's antidumping committee voted to adopt import duties of up to 87 percent on screws and bolts from China.
I also found the following from a site I've just come across called SteelGuru. It says Chinese steel producers are girding up for the impending EU sanctions:
It is reported that China's steel enterprises have already prepared not to export any products as the result of the voting on whether to impose 25% temporary tax on Chinese steel imports will come out soon. If the proposal be approved, it will take effect from February and last for 6 months. Until then, the European Commission should decide whether to propose definitive duties which would last for at lease five years or not.

Mr Bai Ming, vice director of the international market research department of Chinese Academy of International Trade and Economic Cooperation, citing the European steel producers' complaints of China's suspected subsidies said the government had not provide[d] any kind of subsidies. The foreign producers just made a mistake to take the government services as subsidies.

He figured that, China is becoming the biggest steel producer in the world and it owns a pretty good international market. Therefore, some foreign producers think they have been ruined by Chinese enterprises amid the sluggish global market. In addition, some foreign states just trick their people by imputing (blaming?) China for the economic slow down so as to keep their own images. He added that "Therefore, not only steel export but also other exports do not perform well. However, each country will come across such [a] bad situation on the way of its economy growing up just like South Korea and Japan."

At present, most Chinese middle[-sized] steel enterprises have reduced their exports by 30% to 40%, Mr Xu the principal of one steel manufacturer in Foshan city, Guangdong province said "We would choose to sell products on domestic market instead of exporting to Europe just as the company can not bear such a heavy export tax. It is also quite difficult to export to South Korea and Japan for the lower price there. Whereas, steel demand stimulated by the state's investment on the domestic market is expected to rebound in H2.”
Interesting stuff. Will there be more to come? Maybe commentators like your truly mistakenly assumed that US-China trade relations would boil over before EU-China ones.