March 15, 2002
China, the world's largest steel maker, filed a complaint today to the World Trade Organization against the United States' decision to impose tariffs of as much as 30 percent on steel imports to protect its producers.
China, which joined the trade body in December, said that Washington's decision violated fair trade practices and that it wanted to negotiate with the United States to reach a resolution to the dispute.
President Bush's decision to impose the tariffs angered government and steel industry officials from Sydney, Australia, to Seoul, South Korea. Australia, Japan and South Korea have also said they may complain to the W.T.O. to have the duties revoked.
"We object to U.S.'s protectionist policy," said Chen Rongkai, an official at the Ministry of Foreign Trade and Economic Cooperation in Beijing. "We ask the U.S. government to scrap these unfair practices."
United States steel imports declined to about 30 million tons last year after reaching a record 39.7 million tons in 1998, according to the American Iron and Steel Institute. Almost one-third of those imports came from Canada and Mexico, two countries exempted from tariffs.
The decision by President Bush handed American steel makers a victory in their bid for protection from what they say is a surge of low- priced imports. Since 1998, 19 steel companies, including LTV and Bethlehem Steel, have sought bankruptcy protection.
United States import barriers may divert South Korean and Japanese steel to China, the fastest-growing steel market, and reduce prices, analysts said.
"Although China doesn't export much to the U.S., this decision will hurt the profitability of Chinese steel companies," Mr. Chen said.
China's State Economic Trade Commission predicted in February that the country's steel companies would see profits reduced this year because of cheaper imports, which would reduce local prices for the metal by as much as 200 yuan ($24.16) a metric ton from last year.
The Baoshan Iron and Steel Company, China's largest and most profitable steel maker, said its 2001 net income fell 14 percent. It predicted that sales this year may fall 5 percent, as cheaper imports cut its market share.
More Information on the World Trade Organization
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