China vows to support steel exports as trade war escalates
China has vowed to push ahead with a controversial tax rebate for its steel sector, after the US said it would slap Chinese imports with a five-fold tax hike, in what's been described as an escalating trade war.
China's finance ministry said today it would "continue to implement a tax rebate policy of steel exports" as it tries to finance a costly capacity closure plan.
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The policy document, dated 10 May, was published hours after the US Commerce Department said it would impose anti-subsidy duties of 256.4 per cent and anti-dumping duties of 265.8 per cent on Chinese exports of Chinese cold-rolled steel.
Asked whether this marks the escalation of a trade war, Gareth Stace, director of Steel UK, said: "Yes. But what's the alternative?"
"We need the global steel sector to come together and find a plan for the long-term sustainable future of the global steel sector," he added.
Steel UK and another industry body, Eurofer, also urged the EU to do more to protect its steel industry from Chinese dumping. The EU's provisional tariff on this type of product from China is currently between 13 to 19 per cent.
"The US is vigorously defending its industry and you'd encourage the EU to do the same," a spokesperson from Eurofer told City PM
China's Commerce Ministry has expressed its "strong dissatisfaction" with the US' move, saying that it should rectify this as soon as possible.
"The US adopted many unfair methods during the anti-dumping and anti-subsidy investigation into Chinese products, including the refusal to grant Chinese state-owned firms a differentiated tax rate," it said in a statement.
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China has ramped up exports of steel in recent years, as it tries to move towards services-led growth and away from traditional manufacturing, simultaneously avoiding mass job losses.
However, this has led to accusations of steel-dumping in markets such as Europe, where producers are already hobbled by high energy costs as well as so-called green environmental taxes.