Chinese steel maker fights legal battles over unfair tariffs Viewpoint 2018-10-12 13:26:00

Higher tariffs are no match for at least one Chinese company. Tiangong International, a steel company based in eastern China's Jiangsu province has a history of winning overseas legal battles. And their most recent victory has it avoiding higher costs when it comes to their exports to the US market.  

It's part of the daily grind for workers at Tiangong International. Casting special steel everyday keeps Tiangong an industry leader, specializing in high-speed steel and cutting tools.

Despite ongoing global trade tensions, not many here in the exports-oriented seem worried. One reason is that managers here appealed unfair tariffs at the international stage.

Recently, the US Department of Commerce amended results of the so-called Section 232 investigation, largely cutting the countervailing duty imposed on Tiangong, from 251% to just 24%.

"Under the complex US trade system, we found out the Commerce Department has an expedited review program. Tiangong was qualified and then we applied for the review last April. As far as I know, we are the only Chinese steel company to use this program," said Xu Shaoqi, director of Tiangong's legal affairs department.

Behind that is 17 months of dedication by Xu and his team – talking to dozens of legal experts from both China and the US.

"The whole team put lots of effort in preparing questionnaires the Commerce Department handed to us. To answer each question, we need to attach ample evidence," Xu added.

It's not the first victory for Tiangong.

In 2016, the company won an appeal against the European Union's anti-dumping and anti-subsidy investigations, saving itself from the proposed tariffs then.

And just last month, Tiangong attended an EU hearing on safety measures for imported steel products as the only representative for Chinese steel companies.

But chairman of the board Zhu Xiaokun said the key strength is not just its powerful legal team.

"As a private firm, we don't have any subsidies from the government. Our development totally depends on the continuous innovation of our products. So, we let our products speak for themselves," Zhu said.

Established 37 years ago, the private steel maker has also faced issues like overcapacity. But Zhu said it's the craftsmanship that has helped Tiangong gradually turn itself into a high-tech enterprise. That's also why it remains confident even with the escalating China-US trade frictions.

"When the Trump administration first imposed 25% tariffs on imported steel in March, we reached an agreement with our American clients that each party would share half of the additional costs in the first two months. But after that, our clients no longer asked us to share the burden because our products are much needed in the US steel industry and it's incomparable," Zhu told CGTN.

Because of America's protectionist measures, steel exports from the Chinese mainland to the US have slumped over the past decade. Now steel from China only takes up less than 2% of America's total steel imports.

And for Tiangong, the US market now only takes up about a quarter of its total exports.

But ironically, many players in American steel industry failed to benefit from that due to rising costs. Analysts say the best solution now is to go back to the negotiation table and hammer out an agreement that can benefit both sides.

(Writing by Alex Guo  Editing by Tammy Yang)
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