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China threatens tariffs over steel probe

NZ NewswireNZ Newswire 16/07/2016

<span style="font-size:13px;">The Huntly section of Waikato Expressway.</span> © Getty The Huntly section of Waikato Expressway. China is threatening to slap tariffs on New Zealand dairy, wool and kiwifruit imports if this country investigates allegations of steel dumping, according to a report.

The warning shot from our major export market comes as dairy farmers struggle with low prices and follows substandard Chinese steel forcing a redesign of bridge piles on the Huntly section of Waikato Expressway.

Fairfax Media reports Pacific Steel has lodged a confidential application for a Ministry of Business, Innovation and Enterprise investigation into China dumping cut-price steel on the New Zealand market.

However, China learned of it and officials were asking the country's biggest export industries to exert pressure on MBIE to make sure it did not go ahead, the report said, citing highly-placed sources.

China believed this country is part of a United States-led alliance against it and threatened reprisal tariffs on dairy, wool and kiwifruit was being used.

In a column, trade negotiator Charles Finny says he is surprised China would try to pressure New Zealand exporters when no decision on the investigation has yet been made.

However, he said a government source had information the Chinese government wanted a New Zealand industry association to pressure MBIE.

China's massive steel industry has been relying on exports as domestic demand slows. The US has criticised it for that and a potential trade battle is looming between the two countries.

At the end of this year, WTO rules around "surrogate" pricing for Chinese steel - aimed at preventing dumping of subsidised steel - expire and WTO countries can take the steel at face value.

But the US has warned China it has not done enough to qualify for market economy status in December, especially in aluminium and steel.

China says it is being singled out for a global steel glut.

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