Friday, 7 December 2007

Is China "dumping steel"?

It appears that the EU is back on the anti-dumping trail.


"Intended to discourage importation and sale of foreign-made goods at prices substantially below domestic prices for the same items."

China has undoubtedly been guilty of such practices in the past. This article signals the EU's intention to keep the EU's growing trade gap under close observation. Tensions are sure to rise in the coming months. Any hint of a recession in the EU and you will see a deluge of politicians screaming for more protection.

Given that this dumping case means we can all buy cheaper cars it does not make it an easy one to negotiate. The bottom line is that it is all about jobs - who are the winners and who are the losers (and crucially which group is the largest).

This is only the beginning.

EU probe into dumping claim [FT]

The European Union is set to launch an investigation into whether China is dumping underpriced steel, in the latest sign of increasing trade tensions.

Brussels diplomats said that national government trade officials would discuss today a recommendation from the European Commission, the bloc's executive arm, to probe imports of hot-dipped galvanised steel from China, used for car bodies.

Eurofer, which groups EU steel producers, complained formally in October that its members had lost sales to cheap steel from China after its domestic market became saturated.

Imports of the metal from China hit €1bn this year, double last year's figure, grabbing a bigger share of a €16bn (£11.5bn) market.

The Commission has nine months from the date it begins any probe to conclude if the industry has been harmed and recommend interim punitive measures, usually tariffs or quotas. Peter Mandelson, the EU trade commissioner, recently warned China publicly that the rapid expansion of its steel exports, fuelled by subsidies, could trigger such moves.

In a statement Eurofer said: "Exports of the products concerned have inundated the EU market. Massive volumes have been dumped on the EU market at dumping margins of up to 40 per cent. EU domestic prices have been undercut by up to 25 per cent."

This had led to capacity being underused, putting jobs at risk, it said.

Mr Mandelson faces a tricky political balancing act over the issue. Car companies, which employ far more workers, welcome the low prices Chinese imports create.

Anti-dumping measures must be backed, or at least not be opposed by, a majority of the 27 member states, which tend to split according to whether their companies benefit from the duties.



Karthik said...

"Is China "dumping steel"?" I think that’s a understatement. China dumps cheap electronics, cycles, toys, green tea and almost everything you can imagine.

They have government sponsorship to trample all over growing competitor economies like India, Bangladesh, Sri Lanka and so on. Below are a few web extracts on their dumping cases. Scroll to the end of my comment to see the cheapest dumping technique they follow.

China Dumping Textiles
WTO has predicted that China's share of the world market in textiles and apparel will jump to 50 percent in 2007 from 17 percent in 2003 solely due to their lowly dumping strategies.

China Dumping in Manufacturing Industries

China Dumping Silicon
Court rejects China silicon appeal - anti-dumping case

Finally - China the Anti Social

I am not even sure if the west will believe the below allegation I have personally heard these reports and have seen proof before reporting it.
Chinese hire men (mostly Nepalese and Bangladeshis) to drive a cycle loaded with cheap Chinese merchandise into Nepal, India and Bangladesh to sell sub standard merchandize that directly affects retailers daily in scores on thousands. This might sound really trivial but it is not to those hundreds closing their shutters down due to this incorrigible, shameful act. Don’t bother reporting it to the Chinese government, they endorse it.

cheap flights beijing said...

The steel is dumped.

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