The month of August has seen the Indian government slap anti-dumping duties on the import of a variety of steel products from six countries including China, South Korea, Brazil and Indonesia.
In the first week, the import duty was imposed on hot-rolled steel products, while a few days ago, the duty was enforced on certain cold-rolled flat steel products from different countries to protect the domestic industry from cheap imports.
In the first case, anti-dumping duties $474-557 per metric ton were imposed on hot-rolled flat products of alloy or non-alloy steel from China, Japan, South Korea, Russia, Brazil and Indonesia, according to a government notification.
The duty will be in force for six months until February 7.
An anti-dumping duty of $474 per ton was imposed on import of hot-rolled flat products of alloy or non-alloy steel of a width up to 2,100 millimeter with a width up to 25 mm from Korea and Japan.
According to an Indian Express report Korean firms affected by this were Hyundai Steel Co. and POSCO. Three Japanese companies — JFE Steel Corp., Nippon Steel and Sumitomo Metal Corp. are also on the list. A similar anti-dumping duty was slapped on imports of similar products from China. Exporters Angang Steel Company Ltd. and Zhangjiagang were among the hardest hit. Imports of the same from Indonesia, Russia and Brazil attracted the $474 per mt duty.
In the cold-rolled category, anti-dumping duties were calculated to be the difference between the landed value of the steel products and $594 per mt will be levied. The duty was imposed for six months for cold-rolled flat products of alloy or non-alloy steel from China, were, South Korea and the Ukraine.
The Indian government’s view was that the goods on the duty list had been exported to India from these countries below normal value, and that the domestic steel industry had suffered “material injury on account of subject imports from the subject countries.”
While some, such as Tata Steel welcome the move, other analysts are critical. Tata Steel’s Managing Director T.V. Narendran said it would stabilize India’s steel industry. The period between October-December 2015 was a tough time for the steel industry, globally, but the worst was behind the industry now, Narendran said.
The Case Against AD Duties
Making a case against anti-dumping duties, including the U.S. imposing such duties, metals expert Tim Worstall wrote in Forbes magazine that the U.S. and India were making their citizens “poorer” with anti-dumping steel tariffs.
According to him, one important aspect that has to be understood about trade is that imports made people richer via lower prices on manufactured goods using metals as raw materials.
“Placing import tariffs on things which make us richer is, thus, somewhere between very stupid and lunatic”, he opined in his commentary. Yet, he added, “that’s what the governments of both the U.S. and India have done.”
Those who make steel in the U.S. and India, however, are now richer, since the recent anti-dumping and trade case decisions, because they are now protected from the competition of cheap imports. Those who consume steel in the U.S., Worstall’s logic prescribes, are now poorer as they have been cut off from cheaper steel from the exporter countries. The same holds true for India, he said.
Yet, one has to also factor in the value of preserving a national steel industry. What if prices, from those cheap exporters, go up abroad after the local competition has been squeezed out?