Cheap ‘Made in China’ fear… Even pro-China countries are turning their backs.

Low-cost Chinese ‘fear’ shakes the world. Countries gear up to counter ‘inventory push-out’
US, Investigates unfair practices in Korea and shipping
EU, to impose additional tariffs on Chinese electric cars in July
Pro-China countries also take anti-dumping measures

Major countries around the world are responding to China’s dumping with trade barriers. Facing China’s export of surplus products through low-cost push-out, retaliatory measures such as retaliatory tariffs and import restrictions are being pursued promptly. This is due to the sense of crisis stemming from the ‘Second China Shock’ since China emerged as the ‘world’s factory’ in the late 1990s.

The US Trade Representative (USTR) announced on the 17th local time that it will start an investigation into the Chinese shipping, logistics, and shipbuilding sectors. This announcement came shortly after US President Joe Biden revealed his plan to triple tariffs on Chinese steel and aluminum products.

President Biden criticized Chinese steel companies in front of USW union members in Pittsburgh, Pennsylvania, saying, “Chinese steel companies dump steel at unfairly low prices on the world market because they produce much more steel than necessary.” He emphasized, “They are not competing, they are cheating.” The previous day, Katherine Tai, USTR Representative, mentioned during a House hearing that “(we are) ready to take retaliatory measures (against China).”

Other major countries have also responded to low-cost Chinese products. The European Union (EU) plans to impose additional tariffs on Chinese electric cars from July. It is also considering import restrictions and high tariffs on a wide range of products, including Chinese electric bicycles, fiber optic cables, wind turbine generators, and solar panels. India has been imposing anti-dumping tariffs on Chinese steel since September last year. Pro-China countries are also showing movement to build trade barriers against China. Brazil, a member of the BRICS economic cooperation body led by China, is reportedly conducting anti-dumping investigations in at least six areas, including steel and chemical products.

The global economy is feeling the pressure of the ‘Second China Shock’. As China pushes out surplus products at low prices, industries in various countries are being shaken and jobs are being threatened. Industries in various countries, regardless of region, are on high alert against China’s low-cost offensive.

○”Chinese steel companies receive government subsidies and dump”
The USTR announced that it will begin an investigation into the Chinese shipping, logistics, and shipbuilding sectors after reviewing petitions from five labor unions, including the United Steelworkers (USW). These unions requested that the USTR investigate China’s unfair practices, policies, and practices in the maritime, logistics, and shipbuilding sectors. They claim that the Chinese government’s subsidies and various privileges are supporting industries, causing damage to the US shipbuilding industry.

The US is stepping up pressure on Chinese low-cost products. President Joe Biden instructed the USTR to consider tripling tariffs on Chinese steel and aluminum products. President Biden said in a speech to USW members in Pittsburgh, Pennsylvania, “Chinese steel companies don’t have to worry about making profits because the Chinese government provides substantial subsidies.” He said, “In the early 2000s, when Chinese steel flooded the market, steel cities in Pennsylvania and Ohio were hit hard,” and “We will make sure that doesn’t happen again.” The US is also reportedly considering increasing tariffs on other Chinese imports, such as electric cars, batteries, and solar panels.

○Chinese solar panels used as fences
In Europe, Chinese low-cost products have been under scrutiny for some time. The European Solar Industry Association warned in February that European solar panel manufacturers will soon start to close their doors without urgent support from the European Union (EU). According to the Financial Times, surplus Chinese solar panels are being used to make garden fences in Germany and the Netherlands. Solar panels should be installed on roofs for high efficiency, but using panels as fences is more economical due to the soaring price of wood used for fences.

Chinese electric cars are also dominating Europe. The Financial Times reported on the 9th that “Chinese electric car inventories are piling up, turning European ports into parking lots.” The EU plans to impose retaliatory tariffs on Chinese electric cars imported to the EU from July.

○Accepting losses to dominate the market
Not only advanced countries like the US and Europe but also other countries are suffering from China’s dumping exports. In Chile, steel industry workers held a protest demanding high tariffs on Chinese steel on the 9th. They appealed, “For the past decade, large quantities of Chinese steel have been imported at prices below market prices, leading to continued losses for steel companies.” Brazil has also decided to conduct anti-dumping investigations in six areas, including steel, chemicals, and tires, at the request of the industry last month.

China’s low-cost offensive is not only affecting manufacturing but also distribution. Wired, a US IT magazine, reported that Chinese e-commerce company Tmall is losing an average of $30 per customer order to target the US market. Estimated losses in Canada, Australia, and New Zealand range from $588 million to $954 million annually.