The EU is looking for new protectionist measures against overcapacity in China

The President of the European Commission, Jean-Claude Juncker, has warned Chinese officials that Brussels has drawn up a tough system of anti-dumping tariffs that will penalize Chinese manufacturers for their inability to curb overcapacity in China.

Brussels is expected to make an official proposal on these new trade protections next month. The impending proposal is one of the most anticipated policy decisions from the Commission, as many of Europe’s core industries – such as steel, aluminium, ceramics and textiles – complain that they could soon be squeezed out by imports, ultra- cheap, from China.

China’s overproduction of steel is about twice the level of the total production of the E.U.

Protection against China has become a growing problem for Brussels. Because he was forced to admit in July that, in accordance with the rules of the World Trade Organization. EU countries should start treating Beijing as an industrialized „market economy” in trade disputes.

Overcapacity in China – monitoring mechanism

„It is essential that China accept the establishment of a mechanism to monitor overcapacity in the steel sector and its causes. We discussed the issue at the last EU-China summit in July and agreed on a bilateral working group. Jean-Claude Juncker said in Hangzhou.

In accordance with the complex requirements of the „least tax rule”. The EU does not usually impose tariffs to recover the full amount dumped, as is the case in the US. The EU uses much lower penalties, calculated only to counteract any real damage to European companies.

While France and Germany are pushing to abandon the rule of the lowest tax and switch to a tougher system like the one in the U.S., Britain and other northern European countries have blocked any changes they consider against the spirit of free trade.

Article source: http://www.politico.eu/article/eu-vaunts-new-trade-defenses-to-hit-chinese-steel-overproduction/