Advertisement

China steels itself for new front in trade war after US proposes tariffs on metals

  • A tripling of US tariffs on China’s steel imports is likely to trigger a response, analysts said, setting the stage for an expansion of the trade war
  • Action the latest move in an overall strategy to counter industrial overcapacity, as several of China’s trade partners have lodged their own complaints

Reading Time:4 minutes
Why you can trust SCMP
22
China’s steel industry is the latest to come under US scrutiny for alleged overcapacity and excessive exports. Photo: AFP
Amanda Leein Hong KongandKinling Loin Beijing
Beijing is likely to retaliate against the higher US tariffs on Chinese metal products proposed by US President Joe Biden, analysts said, creating a new trade battleground between the world’s two largest economies and a staging area for complaints over the Asian manufacturing giant’s industrial overcapacity.
Advertisement

Biden called for a tripling of import tariffs on Chinese steel and aluminium on Wednesday as he campaigned for re-election in Pittsburgh, a city in the swing state of Pennsylvania that was once the nexus of the American steel industry.

This is the first major tariff proposal on Chinese products from Biden, who has maintained all the tariffs initially levied under the administration of Donald Trump – his predecessor and presumptive challenger in the November presidential election.

14:45

An unwinnable conflict? The US-China trade war, 5 years on

An unwinnable conflict? The US-China trade war, 5 years on

China’s first-quarter gross domestic product rose 5.3 per cent from the year before, growing by 1.6 per cent from the previous quarter. But analysts have flagged concerns over an unbalanced recovery that looks to rely heavily on manufacturing and exports, both of which could be targeted as external tensions mount.

The US Trade Representative’s (USTR) office also initiated a probe into China’s maritime, logistics and shipbuilding industries, alleging that Beijing used “unfair, non-market policies and practices” to dominate these sectors.

Henry Gao, a law professor at Singapore Management University, said he would not be surprised if China imposes countermeasures against the proposed tariffs through countervailing duties against US firms.

“I don’t think the recent meetings [between senior officials from China and the US] will help, as they are more to stabilise the relationship and avoid major surprises on issues such as Taiwan,” said Gao, a veteran researcher on international trade issues.

Advertisement