Beijing to adjust tariffs on steel products
China will start adjusting tariffs on steel products beginning today.
Beijing will temporarily eliminate the 1% import tax rate on pig iron, crude steel and recycled steel raw materials. These adjustments are set to encourage domestic steel producers to reduce their imports of iron ore, lowering energy consumption and carbon dioxide emissions. Export tariffs on high-purity pig iron, ferrosilicon and ferrochrome, which are energy- and pollution-sensitive products in steel-making, will be raised to a maximum of 25% to stimulate the development of the steel industry.
Beijing’s strategy of upgrading the steel industry will not accelerate its plan for carbon neutrality without causing significant global ramifications. China’s tariff changes will only further deteriorate its relations with Australia and the US. Specifically, China’s decreased demand for iron will hit Australia’s economy hard as 80% of its iron ore is consumed in the Chinese market. Additionally, since the US is the largest pig iron importer, China’s increasing effort to import pig iron will certainly escalate US-China competition. Global prices of this material will subsequently rise in the near-term as large pig iron exporters, such as Brazil, are struggling to cope with current US demand.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.