China Launches Anti-Dumping Probe Following Biden Tariff Announcement

Alex Wu
By Alex Wu
May 20, 2024China News

The Chinese communist regime’s Ministry of Commerce announced on May 19 that it has launched an anti-dumping investigation on polyoxymethylene (POM) copolymer imported from the European Union (EU), the United States, Taiwan, and Japan.

The move comes as trade frictions between China and the West have continued to intensify. International affairs observers have pointed out that trade tensions between China and the West may evolve into a full-scale trade war.

The Ministry of Commerce stated that based on the anti-dumping investigation applications submitted by six Chinese companies on behalf of China’s POM copolymer industry, it decided to start an investigation on May 19. The investigation will be completed by May 19, 2025, but can be extended by 6 months under special circumstances, said the ministry.

The period of alleged dumping that will be investigated is between Jan. 1, 2023, and Dec. 31, 2023. The ministry will also investigate any damage done by the alleged dumping on the industry from Jan. 1, 2021, to Dec. 31, 2023.

According to the Ministry of Commerce’s statement, POM copolymer, which is a type of engineering plastic, can partially replace copper, zinc, tin, lead, and other metal materials. It can be used in auto parts, electronic appliances, industrial machinery, daily necessities, sports equipment, medical equipment, pipe fittings, construction materials, and other fields.

The day before the ministry announced the dumping investigation, a warning was posted on a social media account owned by the Chinese Communist Party’s (CCP) state TV network CCTV on May 18, saying that the EU had launched successive anti-subsidy investigations against China and that “China actually has sufficient countermeasures.”

Recently, the EU has launched multiple investigations into whether Chinese manufacturers are dumping goods on its market with state subsidies, such as electric vehicles (EVs) and tinplate steel.

The United States has also had a row with the Chinese regime regarding China’s industrial overcapacity and dumping goods in other countries. President Joe Biden announced on May 14 increased tariffs on Chinese EVs to 100 percent and higher taxes on computer chips, solar panels, and lithium-ion batteries.

A spokesperson for the European Commission, which oversees EU trade policy, responded to China’s investigation. “We expect China to ensure that this investigation is fully in line with all relevant WTO (World Trade Organization) rules and obligations,” and said the EU would carefully study the contents of the investigation before deciding on any next steps.

Precise Retaliation

Davy Huang, a Chinese-American economist, told The Epoch Times on May 20: “The relatively high-end POM copolymer is a compound with relatively good thermal stability. It’s also used in the military, as well as auto parts, and some medical devices and handles on daily tools because of its relatively high strength. But it should be noted that these are in mid-to-high-end grade. China imports about 400,000 to 500,000 tons of them every year from Europe, the United States, Japan, and Taiwan, and the annual trade volume is about $2 billion.”

Mr. Huang pointed out that China’s anti-dumping investigation this time is targeted because the mid-to-high-end products are imported from the EU and the United States. “[The investigation] will hit their markets, but the impact is very limited. Overall, the import volume is not more than $2 billion. Secondly, China’s import dependence on POM copolymer is about 50 percent, as China also has domestic production of the plastic, but the quality is relatively poor.”

He said that the cheap Chinese EVs, which are currently being investigated for dumping by the EU, usually use domestically produced mid- to low-end POM copolymer for parts, and won’t be affected by the Chinese regime’s import investigation. However, Western companies’ production bases in China will be impacted.

“The high-end and mid-level cars produced in China, like Mercedes-Benz, BMW, Tesla, Ford, etc. are exported to Europe and the United States. They often use imported better POM copolymer. Therefore, the things they [CCP] choose to investigate will not have a big impact on China’s industry, but will hit foreign companies’ factories in China. So, it is a targeted strike based on precise calculation,” Mr. Huang said.

Lai Rongwei, CEO of the Taiwan Inspirational Association, told The Epoch Times on May 21: “Imported POM copolymer is mostly used in China’s automobile industry, which is a focus in the trade competition between the United States, Europe, and China, especially Chinese EVs. So you can see that this is simply a tit-for-tat trade retaliation like a head-on collision. So I think although it is an economic issue, it’s actually also political-economic competitions [between China and the West].”

Mr. Lai said of the CCP’s motive for the dumping investigation: “It’s like an eye for an eye. The CCP is being criticized for unfair trade by EU and the United States; now it wants to say to the world that the West is not very good either and are also unfair to China.

“This is a common negotiation technique of the CCP. On the one hand, they will put pressure on you, on the other hand, they will send out some messages that they want to negotiate with you, and then force you to negotiate with them,” he added.

Luo Ya and Reuters contributed to this report.

From The Epoch Times

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