EU continues targeting on Chinese steel imports instead of the revival of its own economy

Visit of Cecilia Malmström, Member of the EC, to Ukraine Cecilia Malmström, Member of the EC in charge of Trade, travelled to Kiev. At this occasion, the Commissioner met with Taras Kutovyi, Ukrainian Minister for Agrarian Policy and Food, members of factions of the Ukrainian Parliament, Ukrainian Parliament (Verkhovna Rada) and with board members of European Business Association (EBA). Finally, she gave a joint press conference with Ivanna Klympush-Tsintsadze, Ukrainian Vice-Prime Minister for European and Euro-Atlantic Integration, after a meeting. Date: 30/09/2016. Location: Kiev. © European Union  , 2016. Source: EC - Audiovisual Service. Photo: Genya Savilov

Visit of Cecilia Malmström, Member of the EC, to Ukraine
Cecilia Malmström, Member of the EC in charge of Trade, travelled to Kiev. At this occasion, the Commissioner met with Taras Kutovyi, Ukrainian Minister for Agrarian Policy and Food, members of factions of the Ukrainian Parliament, Ukrainian Parliament (Verkhovna Rada) and with board members of European Business Association (EBA). Finally, she gave a joint press conference with Ivanna Klympush-Tsintsadze, Ukrainian Vice-Prime Minister for European and Euro-Atlantic Integration, after a meeting.
Date: 30/09/2016. Location: Kiev. © European Union , 2016. Source: EC – Audiovisual Service. Photo: Genya Savilov

It was last Friday when the European Commission (EC) decided to impose temporary anti-dumping duties on imports of two steel products from China. Particularly, the duties concern hot-rolled flat steel and heavy plates of steel with EC’s investigations to show that Chinese products had been sold at extremely dumped prices.

The Commission focuses on finding unfair imports of steel products through trade defence measures. It targets on strengthening these measures in order to prevent jobs in the steel sector within the bloc. Another reason of those imposed duties is the fact that the Commission attempts to deal with the overcapacity problem in the steel industry.

However, China has called these duties “unfair” and expressed its great concern for Europe’s trade protectionism. It is not difficult for anyone to understand that such an action will trigger serious economic consequences for the Chinese businesses.

Are EU’s anti-dumping duties fair enough?

The EU, in an attempt to fight unfair competition, has imposed duties ranging between 65.1% and 73.7% for heavy plates, and 13.2% and 22.6% for hot-rolled steel. In the next six months, the EU has to decide on whether to reconfirm these duties and whether to collect them retroactively for the Chinese heavy steel plates that were imported from August to October 2016.

However, this is not the first time that the EU hits China’s steel imports. The EC imposed duties last August on Chinese cold-rolled steel imports ranging up to 22.1%. As it seems now, the EU is following the US style in the steel industry where high anti-dumping duties are imposed.

On the one hand, these duties are meant to secure European steel jobs, especially in the UK where the steel sector has been affected dramatically. On the other hand though, the interests of Chinese businesses are damaged while EU consumers do not get the cheapest products available.

China’s response

China’s Ministry of Commerce (MOC) stated on the issue that “as the Chinese steel products have a less than five percent share in the EU market, they can have had no serious impact on the EU steel industry”. The MOC mentioned that the EU has used “a variety of unfair and unreasonable surrogate country survey methods to cause serious damage to the interests of Chinese businesses. The Chinese Government has, instead, always advocated prudence and restraint in the use of trade remedy measures. We hope that the EU strictly abides by WTO rules to fully protect the rights of Chinese enterprises.” The Ministry added that the downturn of the EU steel industry is due to its weak economic growth and not because of trade.

The above statement reveals that China has been seeking for a European trade framework with less protectionism in order to be able to invest and provide additional growth to the sluggish European economy.

China further cuts overcapacity

Cutting overcapacity is one of the main goals of the Chinese government because excess capacity in steel and coal is affecting its overall economic performance. G20 governments admitted during last month’s Summit that steel overcapacity was a serious problem with China, the largest steel consumer, underscoring that it is a global issue.

According to Chinese authorities, China has met its 2015 goals regarding overcapacity cuts. The Ministry of Industry and Information Technology and the National Energy Administration stated that “all local governments managed to reduce excess capacity in 16 sectors, including electricity, coal, steel and cement”. In 2015, China reduced production by 31 million tons of crude iron and steel compared to its annual reduction goals of 30 million tons.

In the coming years, China’s plan is to cut steel and coal capacity by about 10% or as much as 150 million tons of steel and half a billion tons of coal.

EU should invest more in its own economic prosperity

EU’s political will to protect European manufacturers and save thousands of jobs in the Old Continent has triggered a monitoring steel imports system around the world, generating freely anti-dumping duties. It seems that the pressure from the EU steel industry has paid off and the EC is attempting to protect EU companies from too cheap imports.

What is more, according to UK steel industry trade body, the anti-dumping duties need to be increased in order to guarantee that Port Talbot, which represents the biggest steel works in Britain, is not affected.

All in all, the EU should build a framework where European steel producers are protected but it is crucial that a broader picture is mainly taken into consideration in order for the EU economy to be mostly benefited from the Chinese trade bonds. Surely though the sluggish limits of the global economy today do not allow for trade wars. Since China is EU’s biggest and strongest trade partner, a more balanced approach is now needed so that both players will continue their lucrative massive trade.

Anti-dumping duties is a tool but every tool when overused often loses its effectiveness and power.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Draghi: printing a full extra trillion non negotiable to help all borrow cheaply

AI has huge potential – but it won’t solve all our problems

Here are 4 tips for governing by design in the Fourth Industrial Revolution

EU and UK soon to be in a post-Brexit rush over free trade agreement with Australia

China rare earth prices soar on their potential role in trade war

UN chief appeals to G7 leaders for ‘strong commitment’ and political will to tackle climate emergency

Hate speech exacerbating societal, racial tensions with ‘deadly consequences around the world’, say UN experts

At epicentre of Indonesia disaster, Guterres praises resilience of Sulawesi people

These 11 EU states already meet their 2020 renewable energy targets

OECD joins with Japan to fight financial crime by establishing new academy

How universities can become a platform for social change

Cities: a ’cause of and solution to’ climate change

No patents on naturally obtained plants and seeds

6 things to know about the General Assembly as UN heads into high level week

‘Regional security and integration’ in Central Africa under threat, Security Council warned

Italy’s populist government appears determined to drive EU economy and markets into recession

South Eurozone countries threatened by rising borrowing cost and expensive euro

European elections: A chance to repel both nationalism and no-deal Brexit

‘Whole spectrum of Afghan society’ must get behind peace talks, UN envoy tells Security Council

CO2 emissions on the rise for first time in four years, UN agency warns

Hundreds of thousands migrants ready to cross the Mediterranean. Only a local matter?

Ahead of State of the Union the European Youth Forum highlights lack of action on youth employment

More than nine in ten children exposed to deadly air pollution

Humanitarian Aid: EU mobilises €6 million for people in need in Colombia

Indonesia: Psychological impact on earthquake survivors turns villages into ‘ghost towns’

Why do medical students have to emigrate to become doctors in 2017?

EU Facility for Refugees in Turkey: EUR 400 million Special Measure on education adopted

Governments must act to help struggling middle class

Security Council urges ‘maximum restraint’ around Gulf region as Iran and United States trade diplomatic blows in New York

Quality Internships: Towards a Toolkit for Employers

Eurozone: Economic Sentiment Indicator recovering losses

UN gender agency hails record-breaking number of women in new US Congress as ‘historic victory’

Ukraine: The West and Russia negotiate shares of influence

We need to talk: UN gears up for 75th anniversary with Global Conversations

Number of migrants now growing faster than world population, new UN figures show

New energy security framework will help meet growing needs in East Africa, sustainably – UN economic wing

Syria: Guterres concerned over reported attacks in Idlib, calls for ‘full investigation’

What is the IMF telling Eurozone about fiscal and banking unification?

Here are three ways Africa’s youth are defeating corruption

Armed insurgency in north-east Nigeria ‘has created a humanitarian tragedy’

How businesses can navigate a global economic slowdown

UN rights chief slams ‘unconscionable’ US border policy of separating migrant children from parents

How 5G can connect the affordable homes of the future

‘All atrocity crimes are preventable’ and can never be justified – UN chief

Public climate finance to developing countries is rising

Get out, stay out: how financial resilience helps end poverty

This is what you need to know about the Iran nuclear deal

The Dead Sea is drying up, and these two countries have a plan to save it

EU and Amazon cut deal to end antitrust investigation over e-books deals

WEF Davos 2016 LIVE: The health of capitalism won’t be the only worry for those who head for Davos

This Syrian national has been trapped at Kuala Lumpur airport for 3 months

Gender equality and medicine in the 21st century: an equity unachieved

Global warming: our responsibility

UN rights chief urges ‘immediate dialogue’ to end Chile unrest

EU lawmakers vote to reintroduce visas for Americans over “reciprocity principle”

Are the G20 leaders ready to curb corporate tax-avoidance?

Third Facebook-Cambridge Analytica hearing: data breach prevention and cures

Why ignoring women is costing financial services money

What will the US look like under Trump? Was his election campaign a big scam?

Press conference by EC Vice-Presidents Valdis Dombrovskis (left) and Jyrki Katainen, on the Commission's proposals in the framework of the financial union (Source: EC Audiovisual Services / Copyright: EU, 2018 / Photo by Georges Boulougouris)

EU Finance ministers agree on new banking capital rules and move closer to Banking Union

More Stings?

Trackbacks

  1. […] EU continues targeting on Chinese steel imports instead of the revival of its own economy – However, this is not the first time that the EU hits China’s steel imports. The EC imposed … […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s