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The China – US power dance. Countries slap anti-dumping duties against each other

April 22, 2010

As exports rebound and global trade picks up, countries have begun to protect their still fragile domestic economies by upping non-tariff trade barriers. Unsatisfied with their weaker positioning in the balance of trade with China, the US on Wednesday announced an investigation into Chinese extruded aluminum products. An assessment was to be made on whether the aluminium imported from China was being dumped, or sold at improperly low prices, due to government subsidies or other aid.

In retaliation to the investigation, China on Thursday slapped five-year anti-dumping tariffs ranging from 4 percent to 96.5 percent on Nylon 6, or polycaprolactam, imported from the United States, the European Union, Russia and Taiwan. Importers of Nylon6 from the US will have to pay the maximum duty of 29.3 percent to 96.5 percent China’s commerce ministry said. Tariffs ranging from 4 percent to 23.9 percent will be imposed on nylon6 imports from the European Union, Russia and Taiwan, the ministry clarified. The anti-dumping duties which are effective immediately will affect the auto, textile and food sectors.

The anti-dumping duty is a step further since last October, when China’s Commerce ministry levied a security deposit on Nylon 6 imported from the United States, the European Union, Russia and the Taiwan region as a temporary anti-dumping measure.

The latest move sees the political power tussle between the US and China continue. While both nations recently agreed on a nuclear free Iran, they haven’t seen eye to eye on the free flow of information in China and the value of the Chinese renminbi which the US states is undervalued. Political analysts also feel that India’s diplomatic proximity with the US, also complicates matters for China as it struggles to balance power and global dominance.

The WTO alleges that dumping occurs when a foreign company sells a product in another market at less than its normal value, generally taken to mean the price in the domestic market or the production cost. In the past, China has created anti-dumping measures against American Chicken and auto products, meanwhile nations have issued anti-dumping measures against Chinese products. In 2009, 17 of the 42 products on India’s anti-dumping list were from China these were worth US$1.5 billion and included silk, satin, yarn, toys, textiles, chemicals and mobile phones.

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