Hong Kong-listed Chinese steelmaker Tiangong confident of US anti-dumping duty repeal, shrugs off trade war
- Jiangsu province-based company has already successfully appealed against a 251 per cent countervailing surcharge
- Our experience can be used by other Chinese companies affected by US tariffs, says chairman
Hong Kong-listed Chinese maker of high-speed steel and cutting tools Tiangong International said on Saturday it would appeal against an anti-dumping duty imposed by the United States, as it moves to bolster its exports to America amid the US-China trade war.
In January 2017, Chinese steelmakers were hit with combined punitive import tariffs of 319.27 per cent – a 251 per cent countervailing surcharge and a 68.27 per cent anti-dumping duty. In August, Tiangong became the only Chinese steelmaker to win a case against the countervailing duty, which was slashed to 24 per cent.
And Zhu Xiaokun, chairman of the Jiangsu province-based steelmaker, said the company was now confident the 68.27 per cent duty would also be slashed to lower than 10 per cent, following its successful appeal against the countervailing duty.
“Victory in the appeal against the countervailing duty has cemented our confidence in further exploring the US market,” Zhu said in an interview. “We are standing firm in our fight against the charges. We are not involved in dumping.”
The US and China have been embroiled in an escalating trade war since July, when the US slapped a 25 per cent punitive tariff on US$34 billion worth of mainland Chinese goods, including steel products. According to estimates about a tenth of China’s steel output, or about 75 million tonnes, was shipped abroad last year.
“Our experience can be copied by other Chinese companies that have been impacted by US tariffs,” said Zhu. “Chinese manufacturers will win market share worldwide as long as we can make better products with core technologies.”
The detention of Huawei’s chief financial officer, Sabrina Meng Wanzhou, by Canadian authorities at the request of the US government on December 1, has added to the uncertainties around trade negotiations between China and the US.
And analysts said Chinese steelmakers, one of the main victims of Washington’s trade war, would be adversely affected if the simmering trade war continued.
“Steel companies are feeling hopeless because they believe tariffs will undermine their exports to the US,” said Xiong Hao, assistant general manager at Shanghai Jump International Shipping, which helps Chinese steelmakers execute export orders. “The export business is important for them, because the domestic steel market is already saturated.”
But Zhu, who said Tiangong had been able to prove it did not receive government subsidies while its products, particularly cutting tools, were welcome by American households, was unfazed. “The trade war has no adverse impact on us. We have no competitors in the US market. Our customers there are able to accept a price hike resulting from the tariffs,” he said.
Tiangong reported 3.9 billion yuan (US$567.7 million) in revenue in 2017, a year-on-year increase of 15 .5 per cent, and said foreign markets accounted for 45 per cent of total sales. Its shipments to the US market represent about 12 per cent of its total sales.
The company reported earnings of 87.9 million yuan for the first half of 2018, a jump of 115 per cent from a year earlier. Its shares have advanced by 47.8 per cent so far this year to HK$1.66 on Friday.