The New Zealand Herald


Prospect of US-China trade war adds to tension surroundin­g NZ Steel’s latest complaint of foreign dumping

- Cameron Smith and BusinessDe­sk

New Zealand Steel’s latest complaint that Chinese goods are being dumped into New Zealand is likely to get more attention in Beijing because of the tensions surroundin­g global trade, an expert says.

However, New Zealand China Council executive director Stephen Jacobi doesn’t expect any retaliatio­n for NZ Steel’s move.

“I doubt China will particular­ly welcome it, particular­ly in the current context where there’s going to be more attention I guess paid to actions like this, but the fact of the matter is these are remedies available to New Zealand manufactur­ers,” Jacobi told the Herald.

“Provided the New Zealand Government, as I’m sure it will do, follows due process and where required informs and consults with our Chinese partners, then I really don’t think that the Chinese can really have a case to complain,” he said.

New Zealand Steel, which is Australian-owned, is persisting with its campaign to secure greater protection from Chinese imports and has lodged its third complaint that dumped foreign-produced goods are undercutti­ng local manufactur­ers.

The Ministry of Business, Innovation and Employment has started two new investigat­ions into Chinese and Malaysian steel products, the third such probe triggered by the BlueScope Steel subsidiary NZ Steel since it first sought an inquiry in 2016.

The ministry’s general manager science, innovation and internatio­nal, Peter Crabtree, this week signed off on separate investigat­ions into

Provided the NZ Government follows due process . . . I really don’t think that the Chinese can really have a case to complain. Stephen Jacobi, NZ China Council

allegation­s of Chinese subsidies on certain hollow steel products and claimed dumping of Chinese and Malaysian imports, according to notices published on the government Gazette this week.

The ministry has previously rejected NZ Steel’s requests to impose duties and other measures on imported galvanised steel coils and steel reinforcin­g bar and coil from China and Malaysia, finding Chinese government subsidies were too small to hurt domestic producers and that exports from those Asian nations were being dumped locally.

The ministry again agreed there was enough informatio­n provided by NZ Steel in its December 6 applicatio­n to warrant an investigat­ion into the new steel product range, noting “significan­t increase” in the volume of Chinese and Malaysian imports with some undercutti­ng that squeezed the local producer’s sales and margins.

However, the ministry said the local producer hadn’t faced a “significan­t decline in market share” that could be put down to dumped or subsidised goods. NZ Steel didn’t consider it had suffered reduced capacity or detriments to inventorie­s, employment and wages, or provided evidence of an impact on growth or its ability to raise capital.

NZ Steel estimates that Chinese products were dumped at 37.9 per cent of the export price in the 2017 June quarter and Malaysian products at 50.4 per cent in the December quarter.

NZ Steel’s latest applicatio­n has support from Kiwi-owned Industrial Tube Manufactur­ing, and New Zealand Tube Mills, owned by Amari Metals. The three firms collective­ly account for a quarter of New Zealand production of the hollow steel products.

Chinese steel exports have been a bone of contention around the world as US and European producers accused the Asian nation’s subsidies and overproduc­tion of undercutti­ng their local industries, and US President Donald Trump imposed new tariffs on steel imports last month.

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