The Sino-US trade wars are heating up. On Friday, the US announced that it would impose stiff duties on Chinese-made oil country tubular goods, which are steel pipes used in the oil industry.
“According to US data, the OCTG trade case is the largest in US history against China imports valued at more than $2.6 billion in 2008 and about $1 billion last year.”
China responded on Tuesday with anti-dumping duties against the US and Russia:
“China has imposed anti-dumping and anti-subsidy duties on a U.S. specialty steel product, and also hit Russia with anti-dumping duties in the same case, its customs administration said.
U.S. producers will be assessed anti-dumping duties of up to 64.8 percent and anti-subsidy, or “countervailing,” duties of up to 44.6 percent on the grain-oriented electrical steel, it said on its website on Monday.
Grain-oriented electrical steel, also known as grain-oriented silicon steel, is used for the cores of high-efficiency transformers, electric motors and generators.
The state-backed China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters hailed the Ministry of Commerce’s April 10 ruling, which the Ministry has not yet publicly announced, state news agency Xinhua said.
“During the investigation the Ministry found that U.S. producers had received subsidies by the U.S. government, and their unfair competition hurt Chinese producers,” Xinhua said, quoting an unnamed person at the chamber of commerce.”
Meanwhile, China also announced its first trade deficit since May 2004
“According to the statistics from the General Administration of Customs, China’s exports were valued at US $112.11 billion in March, up by 24.3 percent year on year, while the imports were up by 66 percent to US $119.35 billion, trade deficit were US $ 7.24 billion. This is the first monthly trade deficit for China since May of 2004.”
What’s interesting is that this trade row with the US isn’t necessarily a sign of rising protectionism in China, as the media often reports. It seems to signal a move toward more trade with emerging markets in Asia and elsewhere. Thus at the recently concluded Boao Forum for Asia, (the Chinese Davos), the Chinese Vice-President called for open markets and not protectionism. Of course, this isn’t free trade, by any means, but state-driven mercantilism. It remains to be seen whether that is any better than state-driven protectionism.
Another example.
While some top oil-exporting countries have curbed their exports to Iran to avoid penalties from the US, state-owned Chinaoil has sold two cargoes of gasoline to Iran in defiance of the US, the first direct sales since January 2009.
As Russia has hardened its position and moved closer to the European and US stance, the Chinese move has become crucial for Iran. Iran continues to be the fifth largest exporter of crude in the world, but US sanctions have meant that its refineries have suffered from lack of foreign investment and it now relies on the world market for its gasoline needs.