U.S. and China Steel Giants Continue To Battle

Politics / Metals & Mining Oct 02, 2010 - 05:20 AM GMT

The US recently filed two new cases against China at the World Trade Organization (WTO) for allegedly violating global trade rules and discriminating against credit card companies and steel makers of the US. While one case challenges China’s imposition of anti-dumping and countervailing duties on a specialty steel product from the US, the other is related to trade barriers in the electronic payment processing market. China refuses to allow the independent functioning of US based credit and debit card companies keen to enter China’s market, and all companies must function through a Chinese entity.

The complaints appear to follow a demand from the US Congress that the US push China for a stronger currency. However, Carol Guthrie, a spokeswoman for the US Trade Representative’s (USTR) office, said, “The filing of the complaints yesterday wasn’t related to pressure from lawmakers or to the hearings. We file cases when they are ready.”

In December 2009, China had announced plans to impose subsidy and anti-dumping duties of almost 25% on flat-rolled electrical steel products originating in the US. The specialty steel product is used in electrical machines, reactors and transformers. China’s move was believed to be in response to US steel makers seeking relief from several types of Chinese steel imported by the US. China implemented the measure in April 2010, drawing severe criticism from the US.

The WTO permits nations to impose duties against imports that adversely affect domestic producers but according to the US, China neither disclosed the facts of its investigation nor did it explain its calculations, thereby failing to follow WTO procedures.

USTR officer Ron Kirk said, “We are concerned that China is breaking its trade commitments to the United States and other WTO partners… by manipulating trade remedy investigations to unfairly restrict exports of American steel.” He added, “China must not abuse WTO procedures to protect its market. This case makes clear that the United States will not permit China to threaten American steelworkers’ jobs by using antidumping and countervailing-duty proceedings to harass US exports.”

The imposition of the duties has cut off access of some of the largest steel makers of the US such as Ohio’s AK Steel Holding Corporation. A far cry indeed from 2008 data when the US exported over $200 million of electrical steel to China.

A spokesman for the Chinese Embassy in Washington, Wang Baodong said in an email, “China’s imposition of anti-dumping duties on the relevant American electrical steel was based on a sound investigation. China will continue to faithfully implement its WTO obligations and at the same time firmly defend its legitimate rights.”

China’s Ministry of Commerce has responded to the complaints with a statement that it will study the issues and handle them as per WTO’s dispute settlement procedure. After a 60-day period, during which consultations between China and the US must take place, the WTO can be requested by the US for a dispute settlement panel.

By Anthony David

http://www.criticalstrategicmetals.com

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