The rain is coming from the wind. This is how Chinese steel companies feel after learning that the European Commission has confirmed the initiation of a subsidy investigation. The latest developments in the EU’s "double reversal" case involving organic coated steel sheets from China have drawn a public response from the Chinese Ministry of Commerce on the 16th, expressing strong dissatisfaction. The ministry emphasized its intention to closely monitor the case and protect its rights within the WTO framework.
Experts interviewed by reporters warned that if the EU proceeds with countervailing duties, it would not only hit Chinese steel producers but also impact downstream industries like appliances and automobiles. Moreover, many EU trade measures are increasingly targeting China, raising concerns about a potential escalation of trade tensions into a full-blown trade war in 2013.
In response to the EU’s latest progress, the Chinese Ministry of Commerce stated that it had submitted written arguments to the European side, urging the EU to abide by WTO rules and revoke any unjust rulings. Just a day before, the Financial Times reported that the European Commission accused China of providing unfair support to its steel producers through below-market pricing for raw materials and other subsidies such as land use, water access, and loans. The report recommended imposing up to 50% countervailing duties on Chinese coated steel imports.
This report will serve as a basis for further actions, and the EU plans to present it to member states this month to decide whether to take formal action against Chinese imports. Analysts warn that such measures could significantly affect not just steel companies but the entire supply chain.
In 2013, the EU continued its tough approach toward China, with new trade initiatives targeting multiple sectors. Recent changes to EU anti-dumping laws have made it harder for Chinese companies to gain market economy status, marking a step backward in trade relations. Additionally, the EU has raised import barriers in various sectors, increasing pressure on Chinese industries.
Experts suggest that the EU’s aggressive trade policies are rooted in its broader "re-industrialization" strategy. As the European economy struggles with debt, the focus has shifted toward revitalizing manufacturing and protecting domestic industries. Steel and automotive sectors are particularly targeted, as they face competition from China’s growing exports.
Despite the tensions, the EU remains China’s largest trading partner. However, experts remain cautious, predicting that trade disputes—especially over subsidies—will dominate the Sino-European economic relationship in 2013. The EU has been intensifying its scrutiny of Chinese subsidies, and this issue is expected to be a major point of contention in the coming year.
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