Pray For U.S. Tariff Waiver, China Taiwan Investigation Into Mainland Steel Products

- Apr 19, 2018-

The DPP authorities announced on the 17th that they have launched anti-subsidy and anti-dumping investigations on the mainland's sale of 5 steel products. There is public opinion that China's Taiwan's “taking a gun and admitting the truth” to the United States will eventually only lead to fire. The China Times stated that both the mainland and the United States are important trading partners of China's Taiwan. If the Cai authorities choose to stand side by side with the economy and trade, not only will Taiwan's economy be directly affected, but the entire people's lives may suffer.” The "going to China" policy is absolutely not feasible.

Targeting is quite obvious

According to a report from the Taiwan Joint News Network on the 17th, the "Treasury Ministry of Taiwan" in China announced that anti-dumping duties are currently levied on certain galvanized and zinc alloy flat-rolled steel products, carbon steel plates, and stainless steel cold-rolled steel products imported from mainland China. Therefore, only countervailing investigations were conducted; at the same time, anti-subsidy and anti-dumping investigations were conducted on stainless steel hot rolled steel products and specific carbon steel cold rolled steel products. “Deputy Director of the Customs and Excise Department,” Xie Jingyuan, said that the United States increased the tariff rate on imports of steel products to the United States by 25% according to the trade expansion law. China's Taiwan is not on the first wave of exemptions; the European Union also conducted investigations on defense measures for 26 steel products. In order to prevent the mainland from "dumping" its steel products to Taiwan, in order to digest production capacity and damage the interests of Chinese Taiwanese companies, and to gain tariff waiver for the purchase of steel products from Taiwan by the United States, the "Ministry of Economic Affairs" of Taiwan Province and relevant departments held meetings. It is considered that it is necessary for the steel products of the mainland to initiate a double investigation.

China's “Central News Agency” in Taiwan stated on the 17th that the “Ministry of Finance” has requested the “Ministry of Economic Affairs” to investigate the damage caused by five steel products from the mainland to China's Taiwan industry. In order to establish anti-subsidy and anti-dumping, it must meet three requirements: First, confirm that the mainland has indeed subsidized or dumped the relevant products; secondly, it did cause damage to Chinese Taiwanese companies; and finally there was a causal relationship between subsidies, dumping, and damage.

Utilize Sino-US Trade Friction to "Do Things"

Relevant data show that of the mainland's steel products export targets in 2016, none of the top ten in China's Taiwan has entered. "Secretary of Economy" Shen Rongjin revealed in early April that China's Taiwan imports steel products from the mainland each year for about US$1.8 billion, and some companies use mainland materials to make screws and other products and then export them to the United States. Substitution of raw materials will be given priority by island manufacturers.

Tang Yonghong, deputy director of the Taiwan Research Center of Xiamen University, said in an interview with the Global Times on the 17th that the Tsai English authorities themselves wanted to weaken the links between the two sides of the Taiwan Strait, including the implementation of the “New South Orientation” in order to get rid of dependence on the mainland market. At the same time, it is considering seeking ties with the United States and Japan more firmly. Therefore, after the United States imposes a tariff of 25% on steel products on the mainland, it will also start dancing. There is no doubt that the United States will consider it.

In response to Taiwan's move to target mainland steel, Ma Xiaoguang, spokesman for the Taiwan Affairs Office of the State Council, has responded by saying that it opposes any attempt to limit cross-strait economic cooperation and sacrifice the common interests of compatriots on both sides of the Taiwan Strait. “Anyone who wants to block the economic cooperation between the two sides of the Taiwan Strait is Can't do it." According to the analysis, the initiation of the double counter investigation revealed the psychology of Taiwan authorities attempting to “do things” by using Sino-US trade frictions. The “Central News Agency” disclosed on the 10th that when the mainland and the United States both accused the other party of the WTO's trade issues, the Chinese Taiwan asked to participate as a third party in the United States’ complaint regarding the issue of intellectual property rights.

"Trade goes to China" is not worth the candle

Taiwan in China mistakenly believes that in the game between China and the United States, it can "take advantage of profits." This is entirely an illusion. Sheng Jiuyuan, director of the Taiwan Research Center of the Shanghai Academy of Social Sciences, told the Global Times on the 17th that under current circumstances where cross-strait relations are so cold, such an approach will definitely cause greater harm to cross-strait relations. Once the problem is acute, the mainland will take countermeasures or create conflicts. The problems it raises must be something that Taiwan cannot tolerate.

The China Times stated that the United States and the mainland are the two most traded economies in the world. When these two countries have a trade war, it is very difficult for other regions to remain untouched. Among them, China's Taiwan is in the most embarrassing position. Because the mainland and the United States are the two largest trading partners of Taiwan in China, last year, Taiwan's exports and imports to the mainland amounted to 130.2 billion U.S. dollars and 51.6 billion U.S. dollars, accounting for 41% and 19.9% of China's Taiwan exports, and China's Taiwan to the U.S. Exports amounted to 36.9 billion and 30.2 billion U.S. dollars, accounting for 11.6% and 11.7%. It is reasonable to say that Taiwan, China, could have negotiated with the United States on the issue of steel, but in the end it hoped to reduce the "continental content" of Chinese steel products sold in the United States and convince the United States to include China Taiwan on the exempt list. This approach can only achieve an effect. It is to tell the United States that "I'm on the same side as you. You should put me on the exempt list." "However, what is the loss of honesty? Benefits? Is it acceptable to the United States? We are still not sure, but we have already seen sequelae." The China Times questioned that the mainland market accounted for 41% of Taiwan's exports, and the United States only accounted for 11.6%. Is it cost-effective for us to trade larger markets for smaller ones? Second, steel products in Taiwan, China, are not only exported to the United States. Any restrictions on the import of steel and raw materials from the mainland will inevitably increase the cost of steel products in Taiwan and reduce the competitiveness of Chinese Taiwan's product exports. What is even more serious is that China Taiwan arbitrarily restricts mainland goods in order to satisfy the United States. If the mainland also restricts Taiwan’s exports to the mainland, will China's Taiwan be able to bear it?

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