China ‘Strongly Opposed’ to Trump’s Steel, Aluminum Tariffs


BEIJING—China lashed out against the U.S. on Friday after the Trump administration launched global tariffs on steel and aluminum and signaled it would step up pressure on Chinese trade practices.

China’s Commerce Ministry said in a statement it “strongly opposed” the move. In a statement, it urged the U.S. to withdraw the tariffs out of respect for the international trading order. It said it would evaluate the impact of the tariffs on China and “take effective measures to protect China’s rights.”

The China Iron and Steel Association called on the government to take measures against U.S. imports, including stainless-steel and electronic products, in response to the U.S. tariffs. The China Nonferrous Metals Industry Association, which represents aluminum makers, called for Chinese measures against U.S. imports such as farm products and high-end consumer products.

Both associations also urged for measures against imports of U.S. coal. Chinese coal imports in recent years has been a boon for U.S. producers.

The impact of the proposed U.S. tariffs on Chinese steelmakers is ultimately expected to be small. While China produces half of the world’s steel, most of it never leaves China.

After Washington imposed stiff penalties on Chinese steel products in 2011, China was largely priced out of the U.S. steel market, analysts say. In the first 10 months of 2017, it accounted for a 2.2% share of U.S. imports of the metal, according to data from the U.S. Commerce Department. It said Chinese steel exports to the U.S. fell more than 30% last year.

Richard Lu, a steel analyst at research firm CRU, said in the long run, the tariffs could end up helping Chinese suppliers of finished aluminum products such as household appliances, potentially making it cheaper to import assembled appliances than the raw materials necessary to build them in the U.S. Other analysts see that possibility as speculative.

China says it exports mainly low-grade steel products to the U.S., which doesn’t threaten the mostly high-end steel manufactured there. President

Donald Trump

had originally said that the tariffs should be implemented for every country, partly to close loopholes such as the shipping of steel to a third country before it goes to the U.S. But on Thursday he suggested that a large number of countries could ultimately be spared.

Hou Jun,

chairman of Shandong Iron & Steel Group, one of the country’s largest steelmakers, said Chinese firms will likely cut prices further in response to the tariff move, which he said goes against global trade rules.

“Protectionism is de facto protecting those lagging behind,” he said on the sidelines of China’s legislative meeting this week. He said he hopes China’s Commerce Ministry will stand up for domestic steelmakers and step up dialogue with the U.S.

Chinese aluminum firms will feel more of the pain as the U.S. is one of the top markets for Chinese aluminum, said

Jackie Wang,

an analyst at CRU. The U.S. had earlier set duties on aluminum products, too, but that was relatively recently and a few have yet to kick in.

China was the fourth-largest supplier of aluminum to the U.S. in the first 10 months of 2017, accounting for about 9.5% of all U.S. imports, according to the U.S. Commerce Department. China produces more than half of the world’s aluminum, according to the U.S. Geological Survey.

The newly proposed tariffs will force Chinese aluminum producers to seek out other markets, but they could redirect exports to countries that end up stepping in to supply the U.S., a net importer of aluminum, Ms. Wang said.

That would effectively reroute trade flows while not necessarily affect overall trade volumes, she said.

Li Daokui,

a former adviser to China’s central bank and now a professor at Tsinghua University, said on the sidelines of meetings in Beijing this weekend that China should take “precise, surgical” measures to counter the U.S. tariffs.

While he cautioned that China should react appropriately to avoid a full-scale global trade war, he suggested that China should aim retaliation at products from states that gave Mr. Trump the most supports in the election campaign, mentioning

General Motors

as a recipient of government subsidies and tax breaks.

China “should find the pain points of Trump administration and his voters. Make it clear that we are not going to be bullied and they also have weaknesses,” Mr. Li said.

Write to Wayne Ma at [email protected]

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