China To Meet With US Over Steel Tariffs

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

22 March 2002

A delegation from the Chinese Foreign Trade Ministry has flown to Washington to discuss the controversial US tariffs on imported steel, which came into effect on Wednesday.

The move follows Premier Zhu Rhongji's criticism of the Bush administration's decision to safeguard the country's steel industry in this way. Referring to a recently reached compromise betwen China and the United States over the importation of genetically modified foods, the Premier speculated as to the likely US reaction to a sudden 30% Chinese import tax hike on American soya beans.

Although the Foreign Trade Ministry stressed last week that their immediate priority was consultation with the US rather than confrontation, the mood appears to have changed somewhat. Speaking on Thursday, a Ministry spokesman warned that although China had not formally filed a complaint to the WTO as yet, it reserved the right to do so.

Other opponents of the measure have not been quite so circumspect. The European Union filed a complaint to the World Trade Organisation almost immediately after President Bush announced the introduction of the tariff, and Japan took its complaints to the trade body just hours after the tariffs came into effect.

Chinese tax experts have suggested that if talks fail, the country could follow the EU's lead, and impose retaliatory tariffs of its own.

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