A worker oversees the production of cold-rolled flat steel in a factory in Dalian, Northeast China's Liaoning Province. Photo: IC

China on Wednesday expressed strong dissatisfaction over a decision by the US to launch anti-dumping and anti-subsidy probes into Chinese cold-rolled steel imports and the country's refusal to offer Chinese State-owned enterprises differentiated tax rates, calling the practices "unjust" and contrary to WTO rules.

Such practices have "seriously" damaged the ability of Chinese firms to defend themselves and allowed the US to impose "abnormally high tariff rates" on them, the Ministry of Commerce (MOFCOM) said on Wednesday. The ministry urged the US to rectify the situation "promptly."

MOFCOM's comments came after the US Commerce Department decided Tuesday to levy import tariffs of 522 percent on Chinese cold-rolled steel, alleging that these products were sold in the US market below cost and with unfair subsidies.

The US upheld its preliminary anti-dumping duties of 265.79 percent for Chinese cold-rolled steel imports, but increased the rate to 256.44 percent from 227.29 percent, Reuters reported on Wednesday. The original complaint was filed in July 2015 by US producers.

Cold-rolled steel is primarily used in automotive body panels, appliances, shipping containers and construction.

Chinese companies affected by the duties include Baosteel Group, Angang Group Hong Kong Holdings, and Benxi Iron and Steel (Group) Special Steel Co, according to Reuters.

In a statement e-mailed to the Global Times on Wednesday, Baosteel Group said that its operations are completely market-oriented and that the US ruling is unfair.

"The decision by the US government offers almost no room for Chinese cold-rolled flat steel exports in the US market because the duties will increase by over five-fold the import prices for the steel products," Wang Guoqing, research director at Beijing Lange Steel Information Research Center, told the Global Times on Wednesday.

The US is increasingly taking a protectionist stance over trade with China and trying to shut down its market to Chinese steel products, Wang noted, adding that the latest measures are quite "extreme."

The US and the EU are also reluctant to grant China market economy status (MES) because doing so would make it harder for them to impose anti-dumping duties on Chinese imports, she said.

Since 2015, the US has launched several trade remedy investigations into steel products from countries and regions including China, Brazil, India and South Korea, and is trying to shift the troubles in its own steel sector to overseas markets, said MOFCOM.

On April 26, US Steel Corp filed a trade complaint against big Chinese steel makers and distributors, trying to bar allegedly unfairly traded Chinese products from the US market.

China believes that the US' actions against steel imports from other countries runs contrary to the WTO principles of free trade and globalization, MOFCOM said.

China not to blame

There has been a rising number of anti-dumping measures against Chinese steel exports recently, amid overcapacity in the global market.

The troubles in the world steel sector have not only been caused by Chinese exports, experts said, noting that factors like the sluggish global economy and weak demand also matter.

Joint efforts are needed to address the issue and taking protectionist measures will not help tackle the challenges faced by the global markets, experts said, noting that while China does face overcapacity domestically, it is taking measures to deal with it.

The State Council, China's cabinet, said Wednesday that China will cut its steel capacity by about 10 percent in the next two years.

The country is planning to transfer 10 million tons of steel capacity to Brazil and the capacity that will be transferred in the first phase will reach 3 million tons, domestic news portal jiemian.com reported Monday, citing Zhang Shengsheng, general manager of an investment company.

"In a bid to further reduce overcapacity, standards for domestic steel producers should be unified, including energy consumption, production technology, product quality and environmental protection," Wu Wenzhang, general manager of Shanghai-based consulting firm Steelhome, told the Global Times on Wednesday.

Due to the US' actions, Chinese steel producers will continue to expand their presence in other countries and regions in Southeast Asia, South America and Africa in the future, Wang said, noting that "domestic steel firms should not be in a hurry but should take steps gradually to seek growth there."