EU to Penalize Chinese Steel Imports

The European Union approved pre-emptive penalties on its imports of steel pipe from China, accepting an argument from steel producers, including the world's largest, ArcelorMittal, that punitive tariffs are needed to protect them from the threat of underpriced imports from China.

The case involves one of the most important finished steel products: seamless steel pipes, which are used in gas and oil plants and the automotive industry. In response, Chinese officials said they are preparing a case at the World Trade Organization against the EU and the United States over steel tariffs.

The EU duties, which will range from 17.7 percent to 39.2 percent, are expected to take effect in October and last five years, EU officials said. Since April, temporary duties of up to 24.2 percent have been in place. Chinese steel exports to the EU were $357 billion in 2008, up from $67 billion in 2000. The EU's steel sector is a $250 billion-a-year business with 420,000 employees, but it has become less competitive against imported steel because of Europe's high labor and environmental costs. The European Confederation of Iron and Steel Industries (EUROFER), which represents European steelmakers, has lobbied hard for higher tariffs.

Trade lawyers in Europe said they expect other industrial sectors to petition the EU for similar, pre-emptive protective tariffs in August.

Contact Alan M. Field at afield@joc.com.