Sun, Feb 18, 2018 - Page 1 News List

PRC warns of retaliation for US tariffs

Bloomberg

In this Dec. 30, 2016 photo, smoke and steam spew from the sprawling complex that is a part of the Jiujiang steel and rolling mills in Qianan in northern China’s Hebei province. The US Commerce Department is urging President Donald Trump to impose tariffs or quotas on imported aluminum and steel.

Photo: AP

China said proposed US tariffs on imported steel and aluminum products are groundless and that it reserves the right to retaliate if they are imposed.

The US recommendations, unveiled by the US Department of Commerce on Friday, are not consistent with the facts, Wang Hejun (王賀軍), chief of the trade remedy and investigation bureau at China’s Ministry of Commerce, said in a statement posted on its Web site.

US Secretary of Commerce Wilbur Ross said the US might impose quotas on imports of aluminum and steel, including a tariff of at least 24 percent on steel imports from all countries.

While it is the strongest indication yet that US President Donald Trump’s administration is ready to take action on its protectionist agenda, Ross said “it wouldn’t surprise us” if the measures were challenged.

The US already has excessive protections on domestic iron and steel products, Wang said.

“If the final decision impacts China’s interests, China will certainly take necessary measures to protect its own rights,” Wang said.

US steel companies and steelworker unions have been pushing Trump to follow through on his promise to protect the industry.

China’s trade partners have complained for years that its industry unfairly benefits from state subsidies and dumps its products at below-market prices.

While China only accounts for about 1 percent of US steel imports, it could challenge US action at the WTO, a process that could take years.

China has long been at the epicenter of global overproduction of steel, but the trade dynamics are shifting as aluminum exports take center stage.

Last month, China boosted its shipments of the lightweight metal for a third month, as domestic supplies spill overseas, while steel cargoes shrank to the lowest in nearly five years as strong domestic growth mops up production and environmental curbs trim capacity.

Rather than tariffs on all imports, Trump may opt for a more “surgical” approach, Ross said at a meeting with lawmakers this week.

The department may invoke a seldom-used section of the 1962 Trade Act, which allows the president to impose tariffs without congressional approval.

Japan views this as more of a security issue, said Yasuji Komiyama, director of the metal industries division at the Japanese Ministry of Economy, Trade and Industry.

Komiyama said steel and aluminum shipped to the US do not pose any threats to US security.

“This is an issue within the US government. Nothing has been decided and therefore the Japanese government doesn’t have any further comment,” he said.

Kobe Steel said there could be ramifications.

“We need to look more closely into this, but if these measures are enacted, it would be difficult for the industry to avoid any impact,” a company official said.

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