Economy
Colombia imposes tariffs on Chinese, Russian steel
China's economic crisis and real estate slowdown have led to overproduction of heavily subsidized steel that is then 'dumped' on the international market at prices below production costs.
![A worker in protective gear carefully manages molten metal at the Paz del Río steel mill in Colombia. [Paz del Río]](/gc4/images/2024/10/23/47926-acero1-600_384.webp)
By Giselle Alzate |
BOGOTA -- The Colombian government has imposed a 30% tariff on steel imports in response to unfair competition, or "dumping" from China and Russia.
The new tariff, which will be added to an existing 5% tariff, came as part of an October 18 decree signed by President Gustavo Petro.
The decision followed a recommendation from the Committee on Customs, Tariff, and Foreign Trade Affairs, citing the harmful impact of dumping on the local industry.
Petro's decree also orders formation of a Steel Pact to tackle low-priced imports and promote clean exports.
![An employee works at a factory producing stainless steel materials in Qingzhou, China. [AFP]](/gc4/images/2024/10/23/47929-acero2-600_384.webp)
"With measures like this, we aim to ensure fair competition for the national industry by combating unfair trade practices," said Colombian Minister of Commerce, Industry, and Tourism Luis Carlos Reyes on October 21.
Countries that lack trade agreements with Colombia have boosted their steel exports to it, undermining local production, the Commerce Ministry said.
As part of the Steel Pact, the government plans to collaborate with private steelmakers to establish a flat steel production plant, adding significant value to steel manufacturing and creating new jobs.
"Amid the global decarbonization process, establishing a flat steel factory with high added value and lower carbon emissions would give us a competitive edge over other countries in exporting steel," Reyes added.
Similar actions
China's economic crisis and the abrupt slowdown of real estate market have led to an overproduction of Chinese steel, heavily subsidized by Beijing and dumped abroad for less than the cost of production.
Acerías Paz del Río, Colombia's largest steel company, has repeatedly called for tariffs on steel imports, citing the significantly lower prices of materials from China that jeopardize thousands of jobs.
"We are impacted by high input costs over the past two years and predatory pricing from countries with surplus production," remarked Fabio Galán, president of Paz del Río, on July 14.
The 35% tariffs -- the maximum permitted by the World Trade Organization (WTO) -- will be in effect for two years, primarily aimed against unfair competition from Chinese and Russian steel.
The Colombian government's imposition of additional tariffs on Chinese steel aligns with Brazil, Mexico and Chile, who have raised tariffs on Chinese steel too.
In mid-September, Huachipato, Chile's largest steelmaker, shut down from the relentless pressure of unfair competition from Chinese steel.