China Imposes Retaliatory Steel Tariffs

by Mary Swire, Tax-News.com, Hong Kong

23 May 2002

China's Ministry of Foreign Trade and Economic Co-operation (Moftec) announced yesterday that it would impose import tariffs on nine steel products to protect Chinese steel manufacturers, in retaliation against protectionist United States tariff walls erected in March.

The new tariffs, ranging from 7% to 26%, will be imposed on imports of selected steel products that exceed certain quotas. "It is a 180-day temporary measure starting from May 24," a Moftec spokesman said yesterday, but China has also threatened to impose a 24% duty on imports of US soya-bean oil if the WTO's dispute settlement body rules against the US steel tariffs. Some imports of US waste paper and electric compressors would also be subject to tariffs of 24%.

Chinese steel firms claim that the US steel tariffs have cost them lost trade estimated at US$1.2 billion, said Moftec, which said the tariffs were not so much aimed at the US but were designed to protect domestic steel firms against other foreign steel-makers seeking new markets after Washington's move.

The Chinese move was immediately criticised by South Korea and Japan, both among the world's largest steel producers, and presumed to be the source of much of the cheap steel now flooding into China.

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