China says US Section 232 findings ‘baseless,' warns of ‘necessary measures to safeguard rights’

China’s Ministry of Commerce (MOC) has called the findings of the United States’ Section 232 investigations “baseless” and warned that it will take “necessary measures to safeguard its rights” should the final decision on aluminium and steel import tariffs affect China’s interests.

US Secretary of Commerce Wilbur Ross on February 16 recommended a series of tariffs and/or quotas in addition to existing duties in place on aluminium and steel imports following the department’s Section 232 investigations into imports of the products.

“The findings of the US investigation are baseless and are totally inconsistent with facts,” Wang Hejun, chief of the Trade Remedy and Investigation Bureau, which operates under China’s MOC, said in a statement on February 17.

Most of the steel and aluminum products imported from the US are low-end civilian products and stakeholders – including those in the EU, Canada, Russia, China, South Africa, South Korea and Vietnam - have proved during the investigations that their exports to the US have not hurt that country's national security, Wang said.

In the findings, the US secretary had outlined three potential measures aimed at limiting steel and aluminium imports on national security grounds: a blanket tariff, targeted tariffs and quotas, or blanket quotas.

The US has imposed several countermeasures against most imported steel and aluminum products and already provided excessive protection to domestic products, and hence should not recklessly impose more restrictive measures on “national security” grounds, Wang said.

“The scope of ‘national security’ is very wide and its lack of a unified definition can easily lead to abuse. If countries follow the example of the US, it will have a serious impact on international trade order,” he added.

With the recent years of sluggish global economic recovery and “difficulties” of the steel and aluminum industries in various countries, all nations should cooperate to explore solutions instead of taking trade restrictions unilaterally, Wang said.

“China urges the US to exercise restraint in using trade protection tools and comply with multilateral trade rules to contribute positively to international economic and trade order,” he said.

“If the final decision of the US affects China's interests, China will definitely take the necessary measures to safeguard its legitimate rights.”

Aluminium prices surged after the release of the US Commerce Department recommendations, with aluminium premiums in the US expected to rise with the introduction of import tariffs. American Metal Market’s assessment of the P1020 premium has been on the rise since before Ross delivered his recommendations to the White House last month. The latest assessment, at 13-13.5 cents per lb, marks an upswing of more than 40% since the start of the year. 

The London Metal Exchange three-month aluminium price had rallied 2% to a two-week high of $2,208 per tonne at close of trading on February 16, with spreads moving into a significant backwardation, after news broke that the US Department of Commerce had advised President Trump on tariffs on aluminium and steel.

US President Trump is required to make a decision on the recommendations by April 19, 2018..

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