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China Trade Fight
EU Escalates Duties On Chinese Imports

China need not wait until Donald Trump takes office to experience protectionist pushback against its export policy. Today, the European Union issued a new round of anti-dumping duties on Chinese metal products. The Wall Street Journal explains:

The European Union on Monday leveled fresh provisional anti-dumping tariffs on Chinese steel and iron products as part of the bloc’s bid to protect European steelmakers harmed by overcapacity.

The duties range between 43.5% and 81.1% and apply to seamless pipes and tubes of iron and steel, which are used in power plants, in construction as well as the oil-and-gas industry.

The duties come as European manufacturers have raised numerous complaints alleging that their Chinese competitors are exporting some steel products to Europe at unfairly low prices. The tariffs announced Monday are the latest in a string of anti-dumping measures against Chinese steel. 

Trump may grab all the headlines with his calls for new U.S. tariffs on Chinese goods, but the truth is that Beijing’s trade problem is already here. With its latest duties, the European Union is starting to catch up to the United States, which imposed 266 percent duties on some Chinese steel products earlier this year. The  EU’s measures are effective for six months, at which point the European Commission will decide whether to extend them for five years.

The new duties were not unforeseen. For months, Western countries have accused China of dumping its excess steel in international markets at artificially low prices. China has denied the practice, but it braced for impact this past week as the European Union moved toward the new duties, and opposition from a UK-led minority collapsed. The new policy comes as a deadline looms for China to finally achieve “market economy status” by the World Trade Organization, a designation that would make it more difficult to bring anti-dumping cases against Beijing.

Meanwhile, though Trump advisers are downplaying his threats of a trade war with China, the new President-elect is not likely to back down entirely on a key platform of his campaign. And if U.S. Steel wins a favorable decision in the landmark complaint against Chinese steelmakers that it filed this year, imports of Chinese steel could be banned outright.

China is not likely to take this sitting down, raising the prospect of retaliatory measures against the United States or Europe. The latest duties levied by the European Union may have been intended as warning shots to induce a change in Chinese behavior, but depending on the Chinese reaction, those shots could very well backfire.

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  • Nevis07

    Anyone betting against a trade war with China under Trump had better hedge their bet. Trump is no fool in my mind, but he also has legitimate points about our trading relationship and related security relationship with China and their neighbors. Nothing is certain for us, but I remain very concerned (disclosure: I voted for Trump). Trump’s election, I suspect will calm the European front, but the Asian one remains unmoved and potentially worsened.

    James Fallow’s at The Atlantic, just had a piece (from a decidedly liberal perspective), which from a mostly hopeful concept on US-China relations as I’ve seen in a decade ended up sounding so potentially concerned about actual conflict. It was revealing that such a liberal perspective from James Fallow would conclude such deep concerns that kinetic conflict was so potentially possible.

    https://www.theatlantic.com/magazine/archive/2016/12/chinas-great-leap-backward/505817/

    • Andrew Allison

      Fallows (like the publication he works for), for whom I used to have the greatest respect, has turned into left-wing running dog. He and the rest of the progressive establishment don’t seem to understand that people are sick and tired of Obama’s so-called “foreign policy”, which has consisted largely of bending over forwards to placate our enemies. The Chinese, like the Russians and Iranians, perceive the US to be weak, and are acting accordingly. Hopefully, under the new administration a red line will actually be one.

      • Nevis07

        Hi Andrew. Yeah, I agree, Fallow and The Atlantic have taken a hard tact to the left over the last several years. I try to force myself to read them so that I don’t allow myself to fall into a groupthink mindset.

        Fallows, who is something of a China expert amongst “journalists,” trips over himself in the piece I linked as he usually does – in an effort to explain and make excuses for China’s recent behavior and why there is a potential of conflict. I only note this specific piece from him because he is decidedly more dark about the prospects of US-China relations than he has typically been in the past.

      • f1b0nacc1

        I agree with your comments (yes, I know…we are going to have to work on that….), but I must take issue with your assessment of Fallows. I have loathed him since his intellectually vacuous hit piece of a book “National Defense” back in the 80s, and haven’t seen much improvement of him since. I did used to enjoy the Atlantic (sometimes still do, though that is getting more rare over time…), but you are right…it has fallen into a bad habit of parroting whatever the current talking points of the Liberal establishment happen to be in vogue….

        • Andrew Allison

          I read the Atlantic Monthly (and, sorry, Fellows), with pleasure for 30-plus years until it, and he, became organs of the DNC. It’s literally a crime that a magazine which was a beacon of literary thought for a century-and-a-half has been turned into dreck.

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