The US has given the go-ahead for the country’s largest steel producer to seek a ban on imports from Chinese rivals, in the first known case in which trade sanctions could be used in retaliation for alleged China government-backed hacking of commercial secrets.
The move comes ahead of a meeting of senior US and Chinese officials in Beijing next week. It highlights the increasingly aggressive tactics the US steel industry is using to fight back against the flood of cheap Chinese steel that has hit global markets in recent years, as well as the growing international concerns about industrial overcapacity in China.
Depending on the outcome the development could eventually result in the next president authorising a blanket ban on imports of Chinese steel in retaliation for the alleged hacking.
US Steel in late April filed the case under the US’s “Section 337” rule, which allows trade sanctions for intellectual property theft. It alleged that some four dozen Chinese companies and their US subsidiaries had both acted as a cartel and benefited from the cyber theft of its production secrets.
In a decision last week the US International Trade Commission gave the go-ahead for the case to proceed, setting the stage for a legal battle that experts say will probably take more than a year for an administrative judge to decide.
This timeframe could lead to a decision related to arguably the US’s most important commercial relationship early in the next president’s first term. Under the law US presidents are given 60 days to block ITC decisions on Section 337 cases, althoughaccording to the ITC “such disapprovals are rare”.
Should he win November’s election, a decision in favour of US Steel could give Donald Trump, the Republican presumptive nominee, a way to deliver quickly on his campaign promises to crack down on China and its trade abuses. “If China wants to trade with America, they must agree to stop stealing and to play by the rules,” his campaign website declares.
Such a decision by the ITC could put Hillary Clinton, the Democratic frontrunner, in a difficult position should she win the presidency, leading to an early confrontation with Beijing over a politically sensitive industry.
Source: FT