EU puts tax on Russia and China steel

Posted on August 4, 2016

Steel Manufacture At ArcelorMittal's Bosnia Plant...A worker dressed in heat protective clothing supervises the flow of liquid metal from the blast furnace at the ArcelorMittal steel plant in Zenica, Bosnia, on Wednesday, March 16, 2016. Steel has become a flash point in EU-China trade relations as Chinese producers challenge European manufacturers such as ArcelorMittal and ThyssenKrupp AG by shipping excess supply to Europe. Photographer: Oliver Bunic/Bloomberg©Bloomberg

The European Commission has imposed more anti-dumping duties on Chinese and Russian steel imports and has applied the penalties retroactively for the first time, in a fresh move to protect the bloc’s producers.

The duties on cold-rolled steel, which is used to make cars and washing machines, range up to 22.1 per cent for Chinese imports and up to 36.1 per cent for Russian imports. The rates are a little higher than provisional penalties in place since February.

    The European steel industry has long called for tougher EU anti-dumping duties, which aim to protect the bloc’s companies from ultra-cheap imports. Using a different calculation method, the US
    imposed tariffs in excess of 500 per cent on similar cold-rolled steel materials from China earlier this year.

    The commission is planning further measures that would allow it to impose US-style tariffs against steel that is dumped at particularly low prices or subsidised.

    “This shows the EU is starting to tackle the state-supported dumping of steel into the UK, but it’s still being outmuscled by Uncle Sam,” said Dominic King, head of policy at UK Steel, an industry group. Britain will need its own tariff regime once it leaves the EU to ensure that China and Russia do not “destroy” the UK steel industry, he added.

    The duties follow a formal complaint in April 2015 from European steel groups, who argue that surging imports from China are to blame for last year’s price collapse. Steel prices have been rising throughout most of this year.

    Cut-price steel imports have become a particularly politically sensitive topic in Europe and the US as western leaders face a popular backlash against globalisation. In Britain, 11,000 jobs are in jeopardy as efforts continue to rescue lossmaking factories owned by Tata Steel, which has partly blamed China for its problems.

    Steel: Industry feels the heat

    EMBARGOED TO 0001 MONDAY MAY 23 File photo dated 10/05/09 of red hot metal being moved across a heavy forge. Heathrow airport has pledged to use British steel if it is allowed to build a new runway, as Indian conglomerate Tata continues to assess bids for its UK assets. PRESS ASSOCIATION Photo. Issue date: Monday May 23, 2016. A shortlist of seven bidders has been drawn up, with thousands of jobs resting on a successful sale, including over 4,000 at the giant plant at Port Talbot in south Wales. See PA story AIR Runway Steel. Photo credit should read: John Giles/PA Wire

    Producers look to survive by moving into more flexible and specialised operations

    Cold-rolled steel is used in the production of packaging and white goods, as well as in the construction and motor industries.

    China’s commerce ministry said it regretted the commission’s decision, adding that the EU should “avoid abusing trade remedies and sending a wrong signal” to the world. “This move amplifies legal uncertainty and gravely affects normal international trade,” the ministry said.

    The tariff will be levied retroactively on imports registered in the two months before the provisional duties were applied. This is seen as a warning to steel importers to avoid stockpiling in future.

    European data suggest the average monthly volume of imports from China and Russia range between roughly 120,000 tonnes and 162,000 tonnes. The retrospective duties assume imports of 165,000 tonnes per month

    “In the wake of the global steel overcapacity crisis, the commission is applying the trade defence instruments to re-establish a level-playing field between EU and foreign producers,” the EU executive said.

    Although EU leaders have repeatedly pressed Beijing to curtail overcapacity in its steel industry, the sector remains a huge employer at a time when economic growth in China is slowing down.

    The duties target manufacturers including Angang Steel Company in China as well as Russian operators Magnitogorsk Iron & Steel Works and Severstal.

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