By Stuart Burns
The battle has intensified between the European Union and low-cost steel suppliers to the region. Specifically, the E.U. is taking action against China and Russia by imposing more anti-dumping duties on steel products from those regions, and for the first time applied them retroactively, according to the Financial Times.
Duties on Foreign Steel
The FT said the duties on cold-rolled steel range up to 22.1% for Chinese imports and up to 36.1% for Russian imports. The rates are a little higher than the provisional penalties in place since February.
Using a different calculation method, the U.S. imposed tariffs in excess of 500% on similar cold-rolled steel materials from China earlier this year and the E.U. Commission is said to be planning further measures that would allow it to impose U.S.-style tariffs against steel that is believed to be dumped at particularly low prices or is subsidized.
Although jointly targeted, the two countries involved are probably selling steel at well below European levels for different reasons. It is less likely in Russia's unstructured and largely privately owned market that mills are getting direct state aid, but they are benefiting from a massive devaluation in the ruble and struggling with a depressed domestic market making dumping excess production in Europe not only desirable, but financially practical from their perspective.
China, on the other hand, has seen only a relatively mild devaluation in comparison and is almost certainly receiving government or regional state aid - or both - allowing it to export excess production even though its domestic market is doing relatively well.
Not surprisingly, China's commerce ministry is taking a shocked, hurt and surprised line, saying it regretted the commission's decision, adding that the E.U. should "avoid abusing trade remedies and sending a wrong signal" to the world.
"This move amplifies legal uncertainty and gravely affects normal international trade," the ministry is quoted by the FT as saying. The tariff will be levied retroactively on imports registered in the two months before the provisional duties were applied and, as such, is hoped will be a warning to steel importers to avoid stockpiling in the future. European data suggest the average monthly volume of imports from China and Russia range between roughly 120,000 metric tons and 162,000 mt. The retrospective duties assume imports of 165,000 mt per month, the FT said.