WTO Says China Can’t Impose Tariffs on US Steel

The World Trade Organization told China that it cannot impose duties on American steel exports, the United States Trade Representative announced.

It said that China violated the WTO’s rules when it placed penalties on more than $200 million worth of U.S. steel, including products from the Ohio-based AK Steel Holding Corp.

“This is a victory for the United States as well as for American workers and manufacturers,” Trade Representative Ron Kirk said in a statement, adding that the Chinese regime broke international trade rules when it imposed the duties on the steel. 

The product in question was the high-tech grain oriented flat-rolled electrical steel, or GOES, which are iron-based alloys that contain silicon, which is used as a conductor. The steel is mainly used in power transformers, reactors, and rectifiers, a kind of electrical device.

“American manufacturers and workers can compete and win on a level playing field, but China’s unfair duties choked off nearly all U.S. GOES exports to its market,” Kirk added.

U.S. GOES exports dropped from $270 million in 2008 to less than $3 million in 2011, according to the Trade Representative’s office. 

AK Steel and Pennsylvania-based Allegheny Ludlum primarily manufacture the steel. In a release, AK Steel said that GOES accounts for nearly 20 percent of its products.

“It is now firmly established that China’s case was contrary to the WTO rules from the beginning and should never have been pursued,” James L. Wainscott, the CEO of AK Steel, said in a statement. He added, “We are pleased that China at this point has no further avenue for appeals.” 

The ruling backed an earlier WTO finding that was handed down in June, which was based on a complaint lodged by the United States in 2010. Chinese officials appealed the decision.

Dan Ikenson, the head of the libertarian-leaning Cato Institute think tank, described the WTO’s ruling as “a victory for the rule of international trade law.”

“Having recourse to WTO adjudication–and the cooling effect that that process has on potentially explosive trade disputes–is far superior to individual governments, tempted by local political considerations, to respond in kind with tit-for-tat measures. We’ve made great progress since the 1930s,” he told The Financial Times.

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