Another EU-China Trade Dispute: Probes into Steel Imports Launched

Written by | Monday, February 15th, 2016

The European Union started looking into the imports of Chinese steel, warning that they would stir ‘unfair competition’ and threaten Europe’s steel industry that is already being inundated by cheap imports. Brussels is focusing mostly on the imports of seamless pipes, hot-rolled flat steel and heavy plates from China. Last week, the world’s leading steelmaker ArcelorMittal accused China of its huge loss of $8-billion in 2015, which triggered major downsizing.

EU Trade Commissioner, Cecilia Malstrom, said in a statement that the EU could not “allow unfair competition from artificially cheap imports to threaten our industry.” She said that she was “determined to use all means possible to ensure that our trading partners play by the rules”. In addition to launching the probe into selected imports, the EU Commission also imposed anti-dumping duties on cold-rolled flat steel imports from China and Russia and steel bars used in construction also imported from China. Commissioner Malstrom also wrote a letter to Chinese Commerce Minister, Gao Hucheng, urging him to “take all appropriate measures to curb the steel overcapacity and other causes aggravating the situation”. The EU Commissioner warned Beijing that it would face new investigation if nothing is done about the accusations.

In 2015, Chinese steel exports rose by 50 percent, which destabilized the global market and especially the EU. China produces about a half of the global steel output but the slower domestic demand forces Beijing to look for foreign markets. As a measure designed to deal with the excess production, China has announced plans to cut output by as much as 150 million tons over the next five years. Analysts say that the country is currently overproducing about 340 million tons annually. The latest series of probes further fuels the already existing stand-off between China and the EU, whose relations were already plagued by many trade disputes in the past, the most prominent being those over solar panels.

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