China, Taiwan hit with European Union tariffs on stainless steel

[BRUSSELS] The European Union imposed tariffs as high as 25.2 per cent on stainless steel from China and Taiwan to curb competition for EU producers such as Acerinox SA and Outokumpu Oyj.

The duties punish Chinese and Taiwanese exporters of cold- rolled flat products for allegedly selling them in the EU's 5.5 billion-euro (S$8.2 billion) market below cost, a practice known as dumping. This kind of steel is used in everything from elevators and tanks to boilers and kitchen equipment.

EU producers that also include Acciai Speciali Terni SpA and Aperam suffered "material injury" as a result of dumped imports from China and Taiwan, the European Commission, the 28- nation EU's trade authority in Brussels, said on Wednesday in the Official Journal. The levies, which take effect on Thursday, are for six months and may be prolonged for five years.

The case may revive EU-China trade tensions over steel seven years after European producers complained that Chinese competitors had dumped a range of goods in Europe, prompting a series of dumping inquiries. One of those probes covered stainless steel cold-rolled flat products and was closed in 2009 without the imposition of EU anti-dumping duties.

Chinese and Taiwanese exporters including Shanxi Taigang Stainless Steel Co and Tang Eng Iron Works Co increased their combined share of the EU market for stainless steel cold-rolled flat products to 9.5 per cent in 2013 from 5.8 per cent in 2010, according to the commission. China's share grew to 4.3 per cent from 1.8 per cent over the period, the commission said.

The anti-dumping duties against China range from 24.3 per cent to 25.2 per cent, depending on the company. The levies against Taiwan range from 10.9 per cent to 12 per cent.

The trade protection is the preliminary outcome of a dumping probe opened last June by the commission, which has six months to decide whether to turn the provisional duties into "definitive" five-year measures.

The inquiry stems from a May 2014 dumping complaint by European steel industry group Eurofer on behalf of producers that account for more than a quarter of the EU's output of stainless steel cold-rolled flat products.

The EU market for this kind of steel totaled about 5.5 billion euros last year, unchanged from 2013, according to Eurofer.

In a parallel case, the EU is threatening to impose a separate set of duties on stainless steel cold-rolled flat products from China to counter alleged subsidies to Chinese manufacturers.

The commission opened an inquiry in mid-August into possible trade-distorting Chinese government aid. It has until May 14 to introduce provisional anti-subsidy levies and until Sept 14 to apply definitive anti-subsidy - or "countervailing" measures.

BLOOMBERG