China Faces Threat of European Tariffs on Organic Coated Steel

The European Union threatened to impose tariffs on organic coated steel from China to curb competition for EU producers.

The EU opened an inquiry into whether Chinese manufacturers of the metal sell it in the 27-nation bloc below cost, a practice known as dumping. This kind of steel is used in domestic appliances, construction, heating and furniture, among other things, according to ArcelorMittal, the world's largest steelmaker.

The investigation will determine if organic coated steel from China is "being dumped and whether this dumping has caused injury to the union industry," the European Commission, the bloc's trade authority in Brussels, said on Dec. 21, 2011 in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year, and EU governments have 15 months to decide whether to apply "definitive" levies for five years.

The probe stems from a Nov. 7 complaint by the European steel industry association, Eurofer, on behalf of producers that account for more than 70 percent of the EU's output of organic coated steel, according to the commission, which didn't identify any companies.

Brussels-based Eurofer said last month China's share of the EU market for organic coated steel had grown to 15 percent from 0.5 percent in 2004. The association said European consumption had dropped and imports from China had caused "significant injury" to the EU industry.

"Over the past four years imports from China into the EU increased dramatically," Eurofer said in a statement on Nov. 25. "As a result of this, the EU industry lost sales and market share, forcing it to cut back on production and to reduce capacity."