US, EU, Taiwan and Japan hit with inquiry on chemical
Beijing yesterday launched an anti-dumping investigation into imports of a widely used engineering chemical from the EU, US, Japan and Taiwan.
The commerce ministry move targeting polyformaldehyde (POM) copolymer follows anti-subsidy and anti-dumping inquiries into Chinese products by the European Union, the latest launched just days ago.
The US is set to slap yet more tariffs on new-energy products, citing similar reasons.
Beijing’s diplomatic ties with Japan are meanwhile strained over a range of issues, and crossstrait relations are set to be tested further as a new administration takes office in Taiwan today.
The launch of the inquiry also came less than 24 hours after a warning from Yuyuan Tantian, a social media channel affiliated to state broadcaster CCTV, that Beijing had sufficient countermeasures on hand against “double-standards” EU inquiries into Chinese industry, and was prepared to retaliate should the bloc continue to take such steps.
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 inquiry should be completed within a year, but could “be extended for six months under special circumstances”, the Ministry of Commerce said.
The investigation is in response to a joint application from six domestic producers submitted last month, according to the ministry.
A copy of the application was attached to yesterday’s ministry statement. It showed the producers saying that imported POM copolymer from the four sources involved “clear dumping” on the domestic market and had caused substantial harm to 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 last Thursday launched an anti-dumping investigation of flat-rolled iron or steel products plated or coated with tin from China, in a new escalation in trade tensions despite recent moves to stabilise EU ties, including President Xi Jinping’s European tour earlier this month.
Last Tuesday, United States President Joe Biden proposed new, higher tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminium and medical equipment, extending a bilateral trade war.
The White House move raised the prospect of similar measures from Brussels, which has launched a series of investigations into alleged subsidies for Chinese industries such as electric cars and green energy. The sectors are suspected of undercutting European companies.
The bloc earlier said it would close inquiries 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 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 moves, 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 inquiry also came on the eve of the inaugural address by Taiwanese president-elect William Lai Ching-te, labelled a “troublemaker” by Beijing.
The swearing-in of Lai, from Taiwan’s independence-leaning Democratic Progressive Party, will be closely watched by both Beijing and Washington for clues on the future direction of relations across the Taiwan Strait.
POM copolymer is one of at least three categories of POM imported by China. Imports accounted for nearly 45 per cent of the country’s POM needs in 2022, according to data from research firm huaon.com.
The EU, Taiwan, Japan and the US were the third through sixth largest sources, respectively, of POM imports in the first quarter of 2024, based on customs data.