Brussels, February 12

The European Union (EU) launched new probes today into imports of Chinese steel, warning it would not allow ‘unfair competition’ to threaten Europe’s industry already crumbling under a flood of cheap imports.

European steelmakers are reeling from a global glut and last week Luxembourg-based world leader ArcelorMittal blamed China for a colossal $8-billion loss in 2015 while thousands of jobs are being cut.

“We cannot allow unfair competition from artificially cheap imports to threaten our industry. I am determined to use all means possible to ensure that our trading partners play by the rules,” EU Trade Commissioner Cecilia Malmstroem said in a statement. The European Commission, the EU’s executive arm, had opened an investigation into imports of seamless pipes, heavy plates and hot-rolled flat steel from China, the statement said.

The Commission separately imposed anti-dumping duties on cold-rolled flat steel imports from China and Russia. It recalled that it recently also imposed anti-dumping measures on Chinese steel bars used in the construction industry. Malmstroem last month urged China to cut output for everyone’s sake.

“In the wake of a worrying trend, I urge you to take all appropriate measures to curb the steel overcapacity and other causes aggravating the situation,” Malmstroem wrote in a letter to Chinese Commerce Minister Gao Hucheng. The letter also warned China that it faced new probes if nothing was done after its steel exports soared 50 per cent in 2015, destabilising the global market and the EU in particular.

China accounts for half of global steel production but internal demand has slowed sharply along with the economy, forcing it to look overseas. Beijing has announced plans to cut production by as much as 150 million tonnes over the next five years but this is far short of the 340 million tonnes that experts say the country is overproducing every year.

The latest measure on steel comes amid a growing stand-off between the EU and China, which are major trading partners but which have also had many trade disputes in the past, most bitterly over solar panels which continues to rumble on.

In a separate statement today, the Commission said it was extending existing anti-dumping and anti-subsidy measures on imports of Chinese solar modules and cells via Taiwan and Malaysia.