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EU Hits China With Anti-Subsidy Tariffs for Second Time

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March 11 (Bloomberg) -- The European Union imposed tariffs against China to counter subsidies for the second time, targeting Chinese steel in a bid to help EU producers such as ArcelorMittal.

The EU duties as high as 44.7 percent punish Chinese exporters of organic coated steel, used in construction and domestic appliances, for receiving trade-distorting government aid. Wuhan Iron & Steel Co. and Angang Steel Co. are among the companies facing the new five-year import levies.

Most of the EU’s punitive tariffs are aimed at Chinese exporters for selling goods in Europe below cost, a practice known as dumping. The EU today also turned provisional anti-dumping duties on Chinese organic coated steel into five-year measures while lowering the rates, in some cases to zero.

European organic coated steel manufacturers that also include ThyssenKrupp AG and Voestalpine AG suffered “material injury” as a result of subsidies to Chinese competitors and dumping by them, the 27-nation EU said in two decisions in Brussels. The five-year levies against subsidies and dumping will take effect after being published in the EU Official Journal by March 22.

The EU has opened a new front in the battle to protect European manufacturers from Chinese rivals by scrutinizing alleged unfair government aid to them. In May 2011, the EU imposed anti-subsidy tariffs against China for the first time by taxing imports of paper with levies as high as 12 percent. In two separate investigations, the bloc is threatening to slap anti-subsidy duties on bicycles and solar panels from China.

Market Share

Chinese organic coated steel exporters that also include Inner Mongolia Baotou Steel Union Co. increased their combined share of the EU market to 14.6 percent in the 12 months through September 2011 from 9.1 percent in 2008, according to the bloc. European consumption of this type of steel shrank 7 percent over the period, the EU said.

The anti-subsidy levies on Chinese organic coated steel are the outcome of an inquiry that the EU opened in February 2012 after a complaint by European steel industry association Eurofer on behalf of companies that account for more than 70 percent of the bloc’s output of the product.

That came on top of an EU dumping probe begun in December 2011. As a preliminary outcome of this investigation, the EU in September introduced provisional anti-dumping duties as high as 57.8 percent on organic coated steel from China. The bloc applied no provisional measures in the parallel subsidy case.

Lower Levies

The anti-subsidy duties range from 13.7 percent to 44.7 percent. Wuhan Iron & Steel, Angang Steel and Inner Mongolia Baotou Steel Union each face a 26.8 percent duty. Producers such as Baoshan Iron & Steel Co. and Xinyu Iron & Steel Co. face the maximum levy of 44.7 percent.

With the start of the anti-subsidy protection, the EU is reducing the rates of the anti-dumping duties introduced six months ago.

The five-year anti-dumping duties are no higher than 26.1 percent compared with a preliminary maximum levy of 57.8 percent. Wuhan Iron & Steel, Angang Steel and Inner Mongolia Baotou Steel Union each face a five-year rate of 16.2 percent, down from a provisional levy of 42.5 percent.

Baoshan Iron & Steel and Xinyu Iron & Steel each face a zero levy compared with a provisional rate of 42.5 percent.

In a third trade decision today against China, the EU imposed anti-dumping duties for five years on aluminum foil in low-weight rolls to curb competition for German, French and other European producers. This decision will take effect after publication in the Official Journal by March 19.

The levies as high as 35.6 percent cover aluminum foil in rolls that don’t exceed 10 kilograms (22 pounds) -- a type used for consumer packaging -- and follow EU anti-dumping duties imposed for five years in 2009 on heavier rolls from China.

The duties on the low-weight rolls range from 14.2 percent to 35.6 percent, depending on the Chinese company. That compares with provisional anti-dumping duties on the wrapping introduced on Sept. 18 that ranged from 13 percent to 35.4 percent.

To contact the reporter on this story: Jonathan Stearns in Strasbourg, France at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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