China slams higher European steel tariffs as unjustified

EU states and steel producers accuse China of issuing unfair subsidies and flooding global markets at below-market prices

PUBLISHED : Saturday, 30 July, 2016, 5:53pm
UPDATED : Saturday, 30 July, 2016, 10:50pm

Beijing has criticised new European tariffs on Chinese steel as “unjustifiable” protectionism coming just weeks after commerce ministers from G20 nations pledged to promote free trade.

The European Union said on Friday it had set definitive anti-dumping duties on certain Chinese steel bars at rates higher than initially proposed, following a 2015 investigation prompted by complaints from the European steelmaking association, Eurofer.

EU and Beijing to mount joint watch on Chinese steel cutbacks

The announcement drew an immediate response from the Chinese Ministry of Commerce, which said the EU “unfairly” set new tariffs based on higher profit margin targets for European producers.

Fears of a bubbling trade war over steel have dominated G20 talks hosted this year by China. The country – the world’s largest producer and consumer of steel – is looking to host a smooth summit in the eastern city of Hangzhou in September.

In G20 public communiques issued this year, member nations have sought to appear unified, pledging to work together to cut steelmaking capacity at a time when prices are at 10-year lows and struggling mills are closing from Wales to China’s Hebei province. Prices have plummeted in recent quarters as China’s decadeslong construction boom cools.

But tensions remain high as European member states and steel producers accuse China of issuing unfair subsidies and flooding global markets at below-market prices. Beijing, meanwhile, has denied the accusations and said it is working to cut capacity even though the central government’s efforts to pare down enormous state-owned steelmakers have met some political obstacles.

In a statement Friday, China’s Ministry of Commerce said it “regretted” Europe’s protectionist move after a recently concluded G20 trade ministers’ meeting in Shanghai and called on Brussels to “uphold its commitments and avoid sending the wrong signal to the world.”

Record Chinese output risks raising steel tensions with US, EU

China, the EU’s second largest trading partner, has been seeking “market economy status” from Brussels, which would make it harder for the bloc to impose new anti-dumping tariffs.

EU Commission President Jean-Claude Juncker said in July at the EU-China Summit in Beijing that he would vigorously defend Europe’s steel industry. He added that the controversy over Chinese steel exports would shape how whether or not Brussels would give it the market economy designation.