The US has increased its import duties on Chinese steelmakers by more 522% after accusing them of selling their products below market prices.
According to the US Commerce Department, the taxes specifically apply to Chinese-made cold-rolled flat steel, which is used in car manufacturing, shipping containers and construction.
Its ruling comes amid heightened trade tensions between the two sides over several products, including chicken parts.
Steel is an especially sensitive issue.
Photo Reuters
American and European steel producers claim China is distorting the global market and undercutting them by dumping its excess supply abroad.
A separate filing by major US steelmakers to the International Trade Commission is looking to completely ban all Chinese steel imports.
The US steel industry claims that around 12,000 workers have been laid off in the past year because of unfair Chinese competition.
China claims the weak economy is more responsible for the industry’s problems and that it has taken steps to reduce its steel production.
In 2015, China’s exports of cold-rolled steel flat products to the US were valued at an estimated $272.3 million.
According to the Department of Commerce, the US gross domestic product (GDP) grew at an annualized pace of 1.5% in Q3 of 2015, down from a rate of 3.9% in Q2.
The slowdown was partly due to companies running down stockpiles of goods in their warehouses.
On October 28, the Federal Reserve kept rates unchanged and said the economy was expanding at a “moderate” pace.
Low oil prices have hit American energy companies so far this year.
However, lower fuel prices have been good news for consumer spending, which accounts for more than two-thirds of US economic activity.
Consumer spending grew at 3.2% in Q3, down from 3.6% in the second but still a strong reading.
Analysts said that the running down of warehouse stockpiles in Q3 was likely to be a temporary effect and they expected growth to accelerate again in Q4.
For several months there has been intense debate about when the Fed will raise interest rates, and now the focus is on its last meeting of the year in December.
The Fed has said in past statements that it expects to raise rates in 2015, and that labor market participation, inflation and the global economy would be the key factors in its decision.
In its latest statement on October 28, the Fed said: “In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2% inflation.”
However, the Fed dropped comments, which had been used in the previous month’s statement, that weaknesses in the global economy could affect the US.
Financial markets interpreted this as a sign that the Fed might be more likely to raise rates in December.
According to the latest official figures released by Commerce Department, the US trade deficit with the rest of the world fell to a five-month low in July.
The US trade deficit declined 7.4% to $41.9 billion, compared with $45.2 billion in June, the US Commerce Department said.
It represents the difference between the value of what the US exports to the rest of the world and what it imports.
Exports rose 0.4% to $188 billion, helped by stronger global sales of US cars. Imports fell 1.1% to $230.4 billion.
For much of the year, the US trade deficit has been about 3.6% higher than the previous year as a result of lower export sales.
Some in the US remain concerned that economic growth will be hurt by further declines in exports as a result of a stronger dollar and continued overseas weakness in the world’s second-largest economy, China.
Sal Guatieri, senior economist at BMO Capital Markets, forecast trade would continue to drag on US economic growth over the next year. He added a stronger dollar would harm exports and boost demand for imports by making foreign goods cheaper for US consumers.
A sharp slowdown in China in recent market has led to volatile financial markets in recent months, as investors have become concerned that China’s slowdown could have an adverse impact on global growth.
The International Monetary Fund (IMF) said on September 2 that China’s slowdown, volatile financial markets and falling raw materials prices could lead to “a much weaker outlook'” for global growth.
The price of raw materials such as oil and copper has fallen sharply, increasing the economic problems of Brazil, Russia and other commodity exporters.
The July trade report showed that America’s deficit with China rose 0.4% in July to $31.6 bn, the highest level in nine months.
So far this year, the US deficit with China is 8.5% higher than in 2014 and is on track to notch up another annual record. The US trade gap with China is its largest with any country.
Elsewhere, the US trade deficit with the EU climbed to a new record high of $15 billion, as US exports to the EU fell by 5%.
In August, China allowed its currency to devalue, a move that was largely seen as a way to boost exports. But the move will also widen its deficit with nations such as the US.
The US economy grew at an annualized pace of 2.5% in Q2 2013, the Commerce Department said in revised figures.
That was more than double the pace recorded in the previous three months, and above estimates of 2.2%.
The rise, helped by an increase in exports, is a further sign that the economy may be getting back on track.
The government had originally estimated that GDP grew at a 1.7% rate in the second quarter.
The US economy grew at an annualized pace of 2.5 percent in Q2 2013
The revised non-annualized quarter on quarter figure was 0.6%, up from an initial 0.4% estimate.
Housing and business investment, two key sectors of the economy, remained strong in the revised figures.
Housing construction grew at an annual rate of 12.9%, the fourth consecutive quarter of double-digit growth.
Meanwhile, business investment was revised up to a 16.1% rate.
The government also said data from retailers showed they had restocked their shelves at a faster pace in the April-to-June period than first thought.
The positive news could make US central bank economists more likely to begin reducing monthly bond purchases later this year.
The programme is one of the US’s last stimulus measures.
Economists think growth will stay at the 2.5% rate in the second half of the year, boosted by steady job gains and less drag from federal spending cuts.
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