International Trade and Finance Case Study

EU's Anti-Dumping Charges against China: Politicizing International Trade

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Abstract:
From the beginning of the 21st century China had been the biggest driver of both demand and supply in the global steel industry. This had been possible due to China's low labour cost, continuous government supports and its huge population providing a vast market base. However, this surge in Chinese steel exports was affecting the sales of the European steel producers. Hence, the European Confederation for Iron and Steel Industries filed anti-dumping charges against the Chinese steel producers. Applications were filed against China's hot-dipping galvanised steel sheet and cold rolled stainless steel sheet and strip. Charges were also pending against China's wire rod and thick steel plate. Eurofer claimed that the Chinese government provided unfair subsidies to its steel producers which resulted in overcapacity in the Chinese steel market. Due to this, the Chinese steel producers exported a huge amount of low quality steel at below production cost causing material injury to the European steel producers. However, China warned Eurofer against implementing such measures on its steel products. They said that Chinese steel producers were able to meet the demand of the European consumers. Moreover, China provided a huge market for the European producers and China was Europe's largest trading partner. Hence, any anti-dumping measure on Chinese steel would affect the European market. All these factors considered, it remained to be seen how Eurofer would tackle the problem without causing injury to the European market.

Pedagogical Objectives:

• To study the emergence of China as a leader in the global steel market
• To discuss the effects of overcapacity in Chinese steel on the global steel market.
• To analyse the justification of Eurofer's anti-dumping charges against Chinese steel.
• To discuss the effects of these anti-dumping charges on the Chinese as well as the European steel markets.

Keywords :  Eurofer, European steel industry, Chinese steel industry, Chinese steel exports, Anti-dumping charges, Anti-dumping measures, Global steel industry, Unfair subsidies, Overcapacity, European Union, Chinese steel imports, Unfair trade policies, Tariff barriers, European steel consumers, Free trade