China annoyed at 'Surrogate Approach' in EU tariffs

World
Europe

The EU Commission announced on Thursday that it has slapped duties ranging from 17.2 to 27.9 percent on corrosion-resistant steel products for a period of five years, after a year-long investigation led the EU commission to believe that China’s steel products were being sold at below-market prices.

The EU has again applied what is known as the “Surrogate Nation” approach, comparing the prices of China’s corrosion-resistant steel, which is commonly used in mechanical engineering, pipes and appliances, with those of Brazil, far inflating the dumping margins, China’s Commerce Ministry spokesman Wang Hejun said in a statement Thursday evening.

“Chinese companies are receiving unfair treatment under the ‘Surrogate Nation” approach, said Wang.

He stressed that tackling steel overcapacity is a task shared by all nations, and one that cannot be solved by freely employing countervailing measures and slapping heavy duties.

The EU and the United States are the two regions that have yet to honor the obligations of abandoning the "surrogate country" approach, a practice that became invalid in trade investigations concerning China, starting in December 2016 - China’s fifteenth year of WTO membership.

China’s share of the EU market in corrosion resistant steel rose from 10 percent in 2013 to around 20 percent in 2016 and Chinese prices fell by more than the decline in raw material costs, the EU journal said. The value of the EU market is around 4.6 billion euros (5.6 billion US dollars) a year.

China extended the period of tariffs levied on potato starch imported from the EU on Monday, and on Sunday launched an investigation into US sorghum, which dominates with over 60 percent of China’s market.