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China hits out in all directions after US and allies ramp up trade war

China hits out in all directions after US and allies ramp up trade war

China is retaliating over anti-dumping measures taken by the U.S. and European Union amid concern that heavily subsidized Chinese products are threatening national industries.

The country’s Ministry of Commerce on Sunday announced an anti-dumping investigation into POM (polyoxyethylene) copolymers produced in the U.S., the EU, Japan and Taiwan after receiving an application «on behalf of» Chinese producers of the plastics.

The news comes as the trade war between the world’s largest and second-largest economies enters its seventh year amid rising anxiety across the EU, where Chinese producers of electric vehicles (EVs) and other goods have secured commanding market shares in recent years.

«The Ministry of Commerce has decided to conduct an anti-dumping investigation on imported acetal copolymers originating in the European Union, the United States, Taiwan and Japan,» the ministry said in a statement.

Chinese Electric Vehicles Await Shipping
Chinese electric cars at the international container terminal of Taicang Port in Suzhou, Jiangsu province, on February 8. The U.S. and EU have accused China of flooding their markets with low-cost electric vehicles.
Chinese electric cars at the international container terminal of Taicang Port in Suzhou, Jiangsu province, on February 8. The U.S. and EU have accused China of flooding their markets with low-cost electric vehicles.
AFP via Getty

POM copolymers, also known as acetal copolymers, are durable and resistant to wear and chemicals, making them ideal for automotive parts, industrial machinery and electrical components.

Under China’s anti-dumping regulations, these investigations can involve «interested parties» filling out questionnaires, hearings, samplings, and on-site inspections, the statement said. Such probes typically conclude within a year, but can take up to 18 months, the ministry said.

This move follows President Joe Biden’s decision last week to maintain Trump administration tariffs on $300 billion worth of Chinese imports while hiking tariffs on categories totaling $18 billion in value.

Biden, who in 2022 signed legislation allocated over $70 billion and $10 billion to the American EV and solar industries, respectively, cited a need to protect American workers.

«For years, the Chinese government has poured state money into Chinese companies across a whole range of industries: steel and aluminum, semiconductors, electric vehicles, solar panels—the industries of the future,» Biden said at the White House on Tuesday. «We’re not going to let China flood our market.»

The Chinese government has been estimated to spend more than twice as much on industrial subsidies as the U.S., giving companies an unfair advantage.

Tariffs on Chinese EVs, which have a negligible market share in the U.S., have quadrupled from 25 percent to 100 percent, while those on solar cells were raised from 25 percent to 50 percent. Other targeted products include major Chinese exports such as steel, aluminum, semiconductors, lithium-ion batteries and rare earth minerals.

China is now the dominant force in green tech, estimated to control some 80 percent of the solar panel supply chain alone. Chinese EV exports soared from 4.2 percent of the global total to 35 percent last year, according to the U.S. Energy Information Administration.

Reaction to Sanctions

The Chinese commerce ministry stated that the sanctions violated Biden’s pledge «not to seek to suppress and contain China’s development» and vowed «resolute measures to defend its rights and interests.»

Peter Sattler, senior lecturer in economics at Duke Kunshan University, told Newsweek that these tariffs are the wrong approach from the perspective of U.S. consumers.

«The fear of an even bigger China Shock in the auto industry during this transition might be driving these tariffs,» he said, speculating they could be due to «political considerations of keeping the rust belt states of Michigan and Wisconsin in the blue camp.»

The «China Shock» refers to the rapid influx of Chinese goods following the country’s admission to the World Trade Organization in 2001.

Sattler said Chinese products have been a net positive for the U.S. economy. «Competing with the best firms in the world keeps U.S. companies competitive and innovative, and that competition also serves the interest of U.S. consumers.»

Last week, the EU announced a probe into Chinese tinplate steel. The 27-member trade bloc has already launched investigations into Chinese EVs, solar panels, medical devices and wind turbines.

Newsweek reached out to the Office of the U.S. Trade Representative and the European Commission via written requests for comment.

China’s relations with Japan are strained over a number of issues, from their territorial dispute in the East China Sea to Japan’s military buildup to counter China’s increasingly assertive posture in the region.

China’s ties with self-ruled Taiwan, which it views as its territory, are set to be tested further following Monday’s inauguration of Taiwan President Lai Ching-te of the Beijing-wary Democratic Progressive Party.

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.