China Steels Itself Against Trade Complaints

4 June 2015

China’s government urged its steel businesses, collectively the largest in the world, to launch lawsuits to defend themselves against a rising tide of international trade complaints, including those from the U.S., its commerce ministry said.

“We encourage Chinese steelmakers and related businesses to actively participate in countersuits, and protect their legitimate interests according to World Trade Organization rules,” the ministry said this week.

The ministry’s stance comes as rising Chinese steel exports run into resistance from competitors at the destinations of its shipments.

Six steelmakers with major U.S. operations, including U.S. Steel Corp. and ArcelorMittal USA, filed a trade complaint on Wednesday seeking punitive tariffs for alleged unfair pricing of imported steel from five countries including China. The suit concerns Chinese exports of corrosion-resistant steel used in the automotive and construction industries.

The United States International Trade Commission must decide within 45 days whether the business of U.S. producers was sufficiently affected to merit such duties. The Chinese ministry hasn’t yet responded to a request for comment directly pertaining to the U.S. steelmakers’ move.

China’s steel exports hit a record-high last year, and have continued to post sizable increases this year. Exports of steel products in May rose 5.8% from a year earlier and 10.9% from April to 8.54 million metric tons, according to China’s General Administration of Customs data.

Last month, a commerce ministry spokesman said Beijing opposes any measures to roll back its steel exports, after the European Commission confirmed a fresh investigation into possible dumping of cold-rolled steel coil exports from China and Russia.

“I feel that it’s quite normal for Chinese steel exports to these countries to be rising, and it’s quite justifiable,” Shen Danyang said. He also said Chinese steel products were “globally competitive.”

China’s steel exports regularly spark friction with its trading partners. The Asian giant makes nearly half the world’s steel, and overcapacity in its vast industry during a time of domestic economic weakness is leading many of its mills to use exports as a means to shift product overseas.

The ministry this week also sought to offer trade talks as a means to tamp down tensions.

“The Chinese government has always advocated that World Trade Organization members should strictly abide by WTO rules and prudent use of trade remedy measures,” it said. “The Ministry of Commerce will continue to promote bilateral dialogue between governments and industry to properly handle trade disputes.”