The EU this week launched a challenge at the World Trade Organization (WTO) to China’s export duties on tin and other raw materials, following a very similar move by the USA last week. The US trade enforcement action against China sought the elimination of China’s export duties on nine different raw materials (antimony, cobalt, copper, graphite, lead, magnesia, talc, tantalum and tin). Current duties range from 5 – 20%, with refined tin subject to a 10% rate introduced at the start of 2008. The EU’s action adds chromium and indium to the list and also refers to quantitative restrictions (quotas) applied to five of them, including tin.
In a statement released on 13 July US Trade representative Michael Froman noted that “the export duties China imposes provide substantial competitive advantages for Chinese manufacturers by making them more expensive for US manufacturers that rely on these raw materials to produce their downstream goods. These nine raw materials are key inputs into high-value Made-in-America products in vital industrial sectors, including aerospace, automotive, electronics, and chemicals.” This is the 13th case launched against China at the WTO by the USA.
China’s Commerce Ministry has rejected the challenges, arguing that the measures are in line with WTO rules and intended to protect the environment. “China regrets the EU request for consultations and will appropriately handle it according to WTO dispute resolution procedures,” the ministry said in a statement posted online.
ITRI View: The cases are expected to take 2-3 years to be resolved. Under the WTO dispute settlement process, the two parties are expected to attempt to resolve a dispute through bi-lateral consultations. In the case of the EU action, this is expected to take 60 days. If these are unsuccessful, the US could then ask the WTO to establish a dispute settlement panel to examine and rule on the issue.
China’s refined tin ingot exports subject to the 10% duty in 2015 amounted to only 561 tonnes. However a further 3,000 or so tonnes of tin was exported in the form of duty-exempt tin products such as anodes or shapes. Industry sources in China feel that the duty will eventually be removed, which will help local tin companies by removing this barrier between the domestic and international markets.