Shares in American steel companies jumped yesterday after the US commerce department slapped tariffs on Chinese imports of up to 266 per cent.
The taxes were imposed on imported cold-rolled steel, typically used to make parts for cars and ships, in an attempt to salvage the domestic industry.
American steelmakers say that their foreign rivals, especially the Chinese, “dump” cheap steel on the market to kill competitors, a suggestion that China has denied. Shares in AK Steel, one of the larger American groups, rose by 7 per cent after the news.
The duties, set at 265.79 per cent for Chinese steelmakers, will be imposed within days. The commerce department also recommended duties on imports from Brazil, India, South Korea, Russia, Japan and the UK. It said that governments in these countries subsidise steel products, enabling their sale at lower prices.
This is the second time since December that the United States has imposed higher tariffs on foreign steel after six American steelmakers, including US Steel and Nucor, filed complaints against imports of hot-rolled, cold-rolled and corrosion-resistant steel last year. Steel from Brazil will face 39 per cent penalties and South Korean producers taxes of up to 6.9 per cent.
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The UK steel industry, once a big employer and a powerhouse of the economy, has been brought to its knees and is asking for similar protectionist moves.
This week Sajid Javid, the secretary of state for business, rejected calls for taxes on imported steel, saying that it would only damage the industry in the long run.
He said: “Punitive tariffs and sky-high duties always do seem like a nice easy solution, but the truth is that excessive protectionist trade tariffs simply do not work.
“Artificially overinflating the price of imported steel would have a hugely damaging effect on British companies further up the manufacturing chain.”
About 2,000 jobs were lost when the SSI steelworks in Redcar closed last year. This was blamed on high energy costs and cheap Chinese imports.
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Angela Eagle, the shadow business secretary, said that the government must act to stop the “tsunami” of steel being dumped on overseas markets by Chinese producers.
She said: “It’s threatening the very existence of the UK steel industry.”