It’s fair to say that the struggles of Britain’s steel industry have been well documented over the last year. Rumblings of a struggling industry came to a head earlier in the year as Tata, the UK’s biggest steel producer, declared their intention to sell their UK operations which were losing around £1 million per day. What has followed has been a protracted negotiation with interested parties, Tata and the Government, but for many that’s merely disguised the greater issue at hand: China.
Steel companies around Europe have been complaining for some time that their ability to compete has been greatly diminished by the masses of steel coming out of China. They accuse the Chinese government of subsidising Chinese steel, allowing it to be sold at a loss in order to drive competition out of business. Tellingly, China has produced more steel in the last two years than Britain has since the year 1870, which draws into sharp relief the scale of China’s steel production.
Now, European leaders have seen enough and have launched a “steel war” with China that could help rescue British jobs. The European Commission have launched an investigation into whether Beijing is handing its homegrown steel producers subsidies. This new Commission probe relates to hot rolled steel, the sort of which is produced at Tata’s Port Talbot steel plant, where thousands of jobs are on the brink. If the commission do find evidence of subsidies then Brussels could move to slap greater tariffs on Chinese steel imports, thus giving European companies a chance to compete.
Business Secretary Sajid Javid said: “This is welcome news for British steel, particularly Port Talbot which produces nearly a million tonnes of this type of steel every year.
“It’s exactly the action we have been pushing hard for in Europe and this type of investigation, the first of its kind, means anti-dumping tariffs can be imposed much earlier.”
A probe of this kind would normally take up to nine months to complete, but the UK government are pressing hard for it to be completed sooner, clearly taking a similar position to the steel industry on China’s alleged actions.
However, Mr Javid has been accused of failing to back British steel by opposing a previous attempt by the EU to block China from dumping cheap steel. A spokesperson for the Department of Business confirmed that they backed tariffs, but only where appropriate and even then not set too high.
Gareth Stace, director of trade body UK Steel, said: “The significant unfair trading practices carried out by China has been a major cause of the worst steel crisis in over a generation here in the UK.
“Unfair trading practises only damage global trade and must be stopped.
“Furthermore, the Commission should take this opportunity to revamp the way it operates and speed up its investigation to ensure that it tackles the problem in the shortest possible time.”