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Datamyne Blog

Covering trade & transport, with tips on using import-export data to advantage

China in the Crosshairs as US Takes Aim at Imports

Category: Imports, Trade Policy

Has China moved into the crosshairs as the US takes aim at imports?

Candidate Donald Trump promised pushback on Chinese imports during his campaign. Now the new president has tapped China critics and trade hawks to fill key trade posts in his administration, as the Wall Street Journal reports. These include Robert Lighthizer, a trade lawyer who has led cases for punitive tariffs on overseas exporters since he left the Reagan administration.

The success of Lighthizer and others in obtaining those tariffs begs the question: Has China ever really been out of the crosshairs of US trade enforcement?

Earlier this month, the US Commerce Department made a final finding of dumping against imports of carbon and alloy steel cut-to-length plate from China. Commerce set a final dumping margin of 68.27% for Jiangyin Xingcheng Special Steel Works Co Ltd, the only respondent in the case, “for the China-wide entity’s failure to cooperate.” [See the January 18 notice on C-570-048 on the International Trade Administration’s Access website.]

Add this to the 140 antidumping or countervailing duty orders the US has already imposed (as of January 9) on imports from China. In fact, China is far and away the top target of US AD/CVD orders, accounting for 37% of the punitive tariffs now in force, as the chart below shows:

US Takes Aim at Imports - US AD/CVD orders in force

Chinese iron and steel products have triggered the most AD/CVD orders, accounting for 32% of the total, followed by miscellaneous manufactured goods at 28%, and chemicals and pharmaceuticals at 21%. The 1% share for the machinery, electronic equipment product group consists of two orders against Chinese crystalline silicon photovoltaic products.

US Takes Aim at Imports - AD/CVD orders against China by product group

We’ve covered the US steel industry’s pushback against Chinese imports extensively on this blog [see the related links below]. Of 70 new AD/CVD orders in 2015-16 (as distinct from renewals of existing orders), 47 were aimed at imports of iron and steel products, 8 of those targeting Chinese iron and steel. Korean iron and steel imports drew 9 orders, Indian imports were subject to 6 new tariff orders.

Are the AD/CVD tariffs having an impact? Data we reported previously showed imports of corrosion resistant steel off sharply [see Chinese CORE Steel Imports Drop 80% as US Tariffs Soar]. Our trade data indicates China’s iron and steel exports to the US are on the decline.

US Takes Aim at Imports - top markets for China's iron and steel exports

A less welcome result of AD/CVD tariffs is higher prices paid by US companies that rely on imports.

And, of course, as the US takes aim at imports, US exports will likely face rising barriers to China and other key markets. As Reuters notes, the Global Times and other state-run Chinese news outlets have issued warnings of retaliation. (The Global Times took note of Lighthizer’s nomination US trade rep as well.) Earlier this month Reuters reported that China has decided to boost punitive tariffs on distillers’ dried grains (DDGS) from the US.

It’s also worth noting that the US is not alone in trying to curb Chinese imports. According to China’s Commerce Ministry, in 2016 there were 48 trade cases filed by 20 countries and regions against China’s steel products, marking a 29.7 percent rise from the previous year. China’s steel exports fell in 2016 for the first time in seven years, and are expected to fall again in 2017.

A more upbeat trade development was the first meeting of the Global Steel and Iron Forum in Berlin on December 16. China’s Minister of Commerce praised the new G20 effort to share information and cooperate on global overcapacity in steel production. China, Germany and the US are this year’s Forum co-chairs. At least the Forum offers the possibility of deal-making.

 

Related blog posts:

You may also be interested in our Steel Import Market Insight:

Date posted: January 24, 2017

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