China accuses the US of 'unfair methods' in steel dumping probe

China has accused the US of employing "unfair methods" during an anti-dumping investigation into Chinese cold-rolled steel products.
China has accused the US of employing "unfair methods" during an anti-dumping investigation into Chinese cold-rolled steel products. PHOTO: REUTERS

BEIJING (Reuters) - The United States has employed"unfair methods" during an anti-dumping investigation into Chinese cold-rolled steel products and should rectify its mistakes as soon as possible, China's Commerce Ministry said on Wednesday (May 18).

The United States on Tuesday said it would impose duties of more than 500 per cent on Chinese cold-rolled flat steel, which is widely used for cars body panels, appliances and construction.

China expressed "strong dissatisfaction" with the ruling, the Ministry of Commerce said. "The United States adopted many unfair methods during the anti-dumping and anti-subsidy investigation into Chinese products, including the refusal to grant Chinese state-owned firms a differentiated tax rate," the ministry said in a statement posted on its website.

"China urges the United States to strictly obey World Trade Organisation (WTO) rules and rectify its mistaken methods as soon as possible," it added.

While a flood of cheap Chinese steel has been blamed for putting producers out of business, China has repeatedly denied its mills have been dumping their products on foreign markets, stressing that its steelmakers are more efficient and enjoy far lower costs than their international counterparts.

China has also denied there are any inducements in place that encourage steelmakers to sell their products overseas, saying trade flows are determined by the market.

In a separate statement faxed to Reuters, the ministry said the US view of China as a non-market economy meant it did not accurately acknowledge the prices and costs of Chinese companies when using alternate country data to calculate dumping rates.

"When determining surrogate country data, it meticulously selected data divorced from the actuality of production for Chinese enterprises, and even used data that was not representative of international markets," it said.

When China joined the WTO in 2001, it agreed to a clause in its accession protocol to give trading partners the option to use a third party's prices to assess if it is exporting below market value.

China has told WTO members that they will have to drop the "discriminatory" methods come December.

As China's economy has slowed, the government has pledged to give more rein to market forces, though foreign business groups and governments have expressed disappointment at the speed of reforms.

The ministry said the United States had ignored China's "huge achievements in reforming state-owned enterprises and establishing a market economy" and denied the "independent market status" of China's state firms.