Mainland China hits EU, US with anti-dumping probe into chemical imports, with Japan, Taiwan also targeted

Mainland China hits EU, US with anti-dumping probe into chemical imports, with Japan, Taiwan also targeted

Beijing launched an anti-dumping investigation on Sunday into imports of a widely used engineering chemical from the EU, US, Japan and Taiwan, as tensions rise with the major trading partners.

The commerce ministry move targeting polyformaldehyde copolymer follows a slew of anti-subsidy and anti-dumping probes into Chinese products by the European Union, the latest launched just days ago, and Washington set to slap yet another round of tariffs on Chinese new energy products citing similar reasons.

Meanwhile, Beijing’s diplomatic ties with Japan remain strained over a range of issues, and cross-strait relations are set to be tested further as a new administration takes office in Taiwan on Monday.

The launch of the probe also came less than 24 hours after a warning from Yuyuan Tantian, a Chinese social media channel affiliated to state broadcaster CCTV, that Beijing had “sufficient countermeasures” at hand against “double-standards” EU probes against Chinese industry, and was prepared to retaliate should the bloc continue to take such steps.

Polyformaldehyde copolymer, or POM copolymer, is a thermoplastic with a wide range of uses, from automotive parts, electronic appliances and industrial machinery to sports and medical equipment, pipe fittings and building materials. It is also able to partially replace metals like copper, zinc, tin and lead.

The probe should be completed within a year, but could “be extended for six months under special circumstances”, the Ministry of Commerce said in a statement announcing the move on Sunday.

The investigation is in response to a joint application from six mainland Chinese producers submitted last month, according to the ministry.

A copy of the application was attached to the ministry statement. It showed the producers saying that imported POM copolymer from the four sources involved “clear dumping” on the mainland China market and had caused “substantial harm” to the local industry.

“A timely and effective anti-dumping investigation and corresponding anti-dumping measures would be conducive to restoring the order of market competition which has been distorted … and thus protect the security of mainland China’s industry and economy,” the application read.

The European Commission on Thursday launched an anti-dumping probe into flat-rolled iron or steel products plated or coated with tin from China, in the latest escalation in trade tensions despite recent moves to stabilise the relationship, including Chinese President Xi Jinping’s European tour earlier this month.

On Tuesday, US President Joe Biden proposed new, higher tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminium and medical equipment, extending the Trump-era trade war between the rival powers.



US proposes new round of tariffs on China in latest trade war escalation

US proposes new round of tariffs on China in latest trade war escalation

The White House move raised the prospect of similar measures from Brussels, which has launched a series of investigations into alleged Chinese subsidies for industries such as electric cars and green energy, which are suspected of undercutting European companies.

The bloc said last Monday that it would close probes under its foreign subsidies regulation into bids by two Chinese firms for a Romanian solar park, since they were pulling out of the tender.

That came barely two months after a Chinese train maker withdrew from a public tender in Bulgaria after the launch of a similar EU investigation.

Yuyuan Tantian, in its post on Saturday signalling China’s willingness to use its deep toolbox against EU anti-subsidy probes, said: “[We] have learned that … the Chinese side has sufficient countermeasures. If Europe continues to take action, the Chinese side will very likely have to take a series of measures to fight back.”

Although it did not elaborate on its sources or what those countermeasures might be, the post indicated that European wine, dairy and aircraft sectors were potential targets.

The China Chamber of Commerce to the European Union characterised the warning as “significant”.

“We urge the EU to refrain from implementing discriminatory measures in subsidy-related probes and to ensure that Chinese enterprises are provided with a fair business environment,” it said in a statement on Saturday.

The announcement of the polymer probe also came on the eve of the inaugural address by Taiwanese president-elect William Lai Ching-te, labelled as a “troublemaker” by Beijing.

The swearing-in of Lai, from Taiwan’s independence-leaning ruling Democratic Progressive Party, will be closely watched by both Beijing and Washington for clues on the future direction of relations across the Taiwan Strait.

Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to arming it.

Again, Japan’s efforts to forge closer security bonds with the United States has drawn censure from China over seeking a “Nato-like bloc” in the Asia-Pacific region.

The copolymer is one of at least three categories of polyformaldehyde (POM) imported by China. Imports accounted for nearly 45 per cent of the country’s POM needs in 2022, according to data from Beijing-based research firm

The EU, Taiwan, Japan and the US were the third through sixth largest sources, respectively, of China’s POM imports in the first quarter of 2024, according to calculations based on Chinese customs data.



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