Chile Strikes Back: Imposes Anti-Dumping Duties on Chinese Steel

The Chilean government has decided to impose anti-dumping duties of up to 33.5% on two types of Chinese steel products that the domestic market with the prices. This comes amid a global trend of countering Chinese products, as evidenced by the U.S. government’s announcement on the 17th to raise tariffs on Chinese steel and aluminum by up to three times.

According to Bloomberg and other sources, the Chilean Price Distortion Prevention Committee announced on the 22nd (local time) that it had tentatively imposed a maximum tariff of 24.9% on Chinese steel bars and 33.5% on forged steel ball products (steel rolled into a spherical shape). The tariff policy will be maintained for six months until September.

This measure was taken in response to the requests of CAP, Chile’s largest steel company, and Molycop. The Chilean government has imposed anti-dumping duties on Chinese steel products six times since 2016. However, as cheap steel products are imported into Chile in large quantities under the Chinese government’s subsidy policy, domestic companies have faced a crisis, leading to louder calls for more robust responses. It announced in March that it would halt operations at its Biobío Province, Huachipato factory due to the cutthroat competition from low-priced Chinese steel. The Biobío provincial government and local workers urged the federal government to make a decisive move, saying, “If we raise tariffs on Chinese steel to North American and European levels, we can keep the factory running and protect up to 22,000 jobs.” Following this, the tariff imposition was implemented, and CAP rescinded its decision to stop factory operations that day.

The Chilean government’s decision could influence other economies in Latin America, such as Brazil and Colombia. These countries have been voicing their difficulties as cheap Chinese products flood their markets due to China’s domestic slowdown and tariff measures from significant countries. According to the Latin American Steel Association, the market share of Chinese products in the regional steel market has jumped from 15% in 2000 to 54% last year. The fact that Mexico suddenly raised its import steel tariffs to 25% last August is also seen as a measure to protect the domestic market. However, these countries are expected to find it challenging to establish tariff barriers due to fears of distorting relations with China, their largest trading partner.