The purpose of this article is to consider the particular aspects of US-Sino trade disputes by analyzing trade frictions in the iron and steel trade between these two countries. In the past 20 years, especially since the establishment of the World Trade Organization (WTO), antidumping (AD) has been a major issue and is still a matter of concern for China’s government and exporters. Moreover, as China is a non-market economy according to US trade law, the US Department of Commerce and the US International Trade Commission have used the substitute country rule, possibly as a way of raising AD taxation unfairly when deciding the dumping margin in cases related to China.
However, the US-Sino AD dispute is certainly a big issue, not only for these two WTO members, but also for other countries. By means of a case study on the iron and steel trade, we found that the US government took advantage of the numbers of trade relief measures to protect its declining iron and steel industry, such as AD measures, safeguarding measures, and so on. It is obvious that China’s booming iron and steel industry resulted in an expansion of iron and steel exports, and this served to increase trade disputes between the United States and China.
China’s government is actively attempting to solve these issues by a variety of methods. For example, in order to control merchandise exports and avoid more disputes with other trade partners, the government reduced the value-added tax (VAT) refund rate of various export merchandise twice in 2007; VAT rates are often involved in trade disputes. China’s government also encourages and promotes the mergers and acquisitions between local corporations and foreign companies, in order to promote product quality and enhance the production capacity of local corporations.
Overall, the US government and US iron and steel corporations often request some trade relief measures to protect the industry from violent competition with imported merchandise. As China is regarded as a non-market economy, the issues related to China will be more complex and will be to China’s detriment. Moreover, seeing the active attitude of US steel and iron corporations, which are strongly supported by the US government, Congress and congressional lobbyists, China’s corporations often request that their own government take part in the negotiation and many outcomes will certainly depend on their government’s decision. However, thanks to the US and Chinese governments’ participation in these trade disputes, solutions will be easier to find and promote in the future.
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