BusinessTop Stories

China vows to act against US trade curbs

Washington eyes hefty import tariffs on steel and aluminum industries

A general view of the site of the Chinese-funded $1.4 billion reclaimed land next to Colombo’s main sea port. China will invest $1 billion in the construction of three 60-storey buildings at a mega-project near Sri Lanka’s main port, Colombo. — AFP

BEIJING: China yesterday warned it would take necessary measures to protect its interests if the US imposes tough trade sanctions against its steel and aluminium exports.

The US Commerce Department on Friday recommended imposing heavy tariffs on China and other countries to counter a global glut in steel and aluminum, laying out an array of possible options in a report to President Donald Trump. The move gives Trump the opportunity to strike a highly public blow for his “America first” trade policy-he is due to decide on the measures next month-but has stoked fears of retaliation and a trade war between the world’s two largest economies.
“If the United States’ final decision affects China’s interests, we will take necessary measures to defend our rights,” said Wang Hejun, a director at China’s commerce ministry, in a statement responding to the US report. The US report framed concerns about Chinese overproduction in terms of national security and defense-an approach refuted by Wang.
“The findings of the investigations (of the US Department of Commerce) are groundless and do not correspond to reality,” he said. Washington “should not lightly adopt restrictive measures under the pretext of ‘national security’ … a vague formula that can easily lead to abuse,” he said.

China produces about half of the world’s steel but supplies less than two percent of the steel imported by the United States. The US and EU argue Chinese overproduction is heavily subsidized by the state and has depressed world prices, hurting their own domestic production.

Trump on Tuesday accused Beijing of decimating American steel and aluminium industries, saying he was “considering all options”.

The US Commerce Department has recommended that President Donald Trump impose steep curbs on steel and aluminum imports from China and other countries ranging from global and country-specific tariffs to broad import quotas, according to proposals released on Friday.

The long-awaited unveiling of Commerce’s “Section 232” national security reviews of the two industries contained global tariff options of at least 24 percent on all steel products from all countries, and at least 7.7 percent on all aluminum products from all countries.

The recommendations were presented to Trump last after he authorized the probes under a 1962 trade law that has not been invoked since 2001. He has until April 11 to announce his decision on steel import curbs and by April 20 to decide on aluminum restrictions.

US Commerce Secretary Wilbur Ross emphasized that Trump would have the final say, including on whether to exclude certain countries, such as NATO allies, from any actions.

“The president has the discretion to modify any of these or to come with something totally different,” he told reporters on a conference call.

He said a global tariff would cover every steel and aluminum product entering the American market from China. Steel stocks soared with US Steel closing up 14.7 percent, AK Steel up 13.7 percent, Nucor ended up 4.5 percent and the broader S&P 1500 steel index 5.3 percent higher.

Century Aluminum shares closed up 8.3 percent, while Alcoa, which has operations across the globe, ended off 0.44 percent. Alcoa said in a statement the US trade actions should focus on Chinese overcapacity and not penalize nations that abide by the rules. Ross said he would not be surprised if countries challenged the measures at the World Trade Organization.

He said “there has been no dialing back” of the recommendations due to objections from industries that use steel and aluminum. “The objective of both reports is to get the production up to a level which will result, in our judgment, in the long term viability of each industry,” Ross said, adding that he did not believe that the recommendations would lead to significant price hikes.

US Senate Democratic leader Chuck Schumer said he hoped the proposals “are the beginning of efforts by this administration to finally get tough on China.”

Alternatively, Commerce recommended a steel tariff of at least 53 percent on all steel imports from 12 countries- Brazil, China, Costa Rica, Egypt, India, Malaysia, Russia, South Korea, South Africa, Thailand, Turkey and Vietnam. Other countries would be subject to a quota limiting their tariff-free access equal to their 2017 steel exports to the United States. – Agencies

Back to top button