China said it will continue giving tax rebates to steel exporters to support the sector’s painful restructuring, defying a move by the United States to impose punitive import duties on Chinese steel products.
A worldwide steel glut has become a major trade irritant.
China has come under fire from global rivals who say it is dumping cheap exports as it faces a slowdown in demand at home.
In a marked escalation of the dispute, the US said Tuesday it will impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used in car body panels, appliances and construction.
However, China’s Ministry of Finance said it will “continue to implement a tax rebate policy on steel exports” as it tries to finance a costly capacity closure plan.
By far the world’s largest steel producer, China plans to eliminate 100-150 million tonnes of annual production — more than the US produces per year — over the next five years.
The finance ministry said China was making special funds available to curb overcapacity in steel and coal and will reward local authorities for exceeding their targets and meeting them early.
The US Commerce Department said the new duties effectively increase more than fivefold the import prices on Chinese-made cold-rolled flat steel products, which totaled US$272.3 million in 2015.
It found that products were being sold in the US below cost and with unfair subsidies.
China’s Commerce Ministry expressed its “strong dissatisfaction” with the ruling and said the US should rectify its mistakes as soon as possible.
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