Peru has initiated investigations into China’s steel dumping, primarily affecting the local industry as companies face unfair competition. The National Institute for the Defense of Competition is looking into claims from local manufacturers reporting significant damage due to imports. This situation reflects a larger crisis in Latin America, where low-priced Chinese steel is undermining domestic markets and leading to substantial job losses and factory closures.
China’s strategy of steel dumping has created a significant crisis in Latin America’s steel industry, endangering jobs and economic stability. The region has responded to this challenge by implementing tariffs and anti-dumping measures against Chinese steel imports to protect local markets.
In Peru, the National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) has launched investigations into the dumping of certain steel products from China, particularly hot-rolled carbon steel pipes, stainless steel sinks, and steel wire rod. This action was initiated following requests from local manufacturers, including notable firms such as Manufactura de Metales y Aluminio Record S.A. and Corporación Aceros Arequipa S.A., citing significant harm caused by these imports to the national industry.
Evidence indicates that the import of stainless steel sinks from China resulted in a staggering dumping margin of 491.5 percent from July 2023 to June 2024. Sergio Cesarin, coordinator for the Center for Studies on Asia-Pacific and India, commented, “This percentage seems brutal to me.” Local production of these sinks fell by over 71 percent, with domestic sales declining approximately 45 percent, reflecting a severe impact on the local economy.
Furthermore, data from state media agency Andina shows that productivity has significantly worsened, with production per worker dropping by 73 percent and profit margins declining by 88 percentage points, leading to negative profitability in 2024’s first half. Local inventories have also diminished by more than 65 percent.
In line with international protocols, Indecopi has informed Chinese authorities of its investigations, with the current inquiry set for six months, potentially extending to nine. Should the unfair practices be confirmed, anti-dumping measures could be enacted.
China has ascended to the forefront of global steel production, primarily through state ownership of its steel companies and a centralized economic model that operates beyond international trade norms. The investigative platform Dialogue Earth highlights, “The Chinese state subsidizes strategic companies… and the steel industry is one of the industries that benefits the most from this government support.”
Since 2010, changes in the international steel trade have led China to focus its surplus production on foreign markets, using low prices as a tactic to maintain its production levels. Despite maintaining high standards, the Latin American steel industry finds it difficult to compete against China’s artificially lowered prices.
Countries like Mexico, Brazil, and Argentina have implemented tariffs on Chinese steel imports to combat unfair competition, resulting in factory closures and job losses. Cesarin emphasized that addressing trade issues with China requires negotiations directly with the Chinese government, complicating the process due to China’s involvement in various projects in Peru across sectors like mining and infrastructure.
In conclusion, to mitigate the detrimental effects of Chinese steel dumping, Latin American governments, especially Peru, must adopt stronger protective measures for their domestic industries. They need to ensure the preservation of jobs and cultivate fair trade practices amidst the ongoing challenges in the steel market.
The investigations into Chinese steel dumping in Peru illustrate the broader crisis impacting Latin America’s steel industry due to unfair competition. With significant evidence showcasing the detrimental effects on local production, it is crucial for governmental authorities to take decisive action. The need for stronger protective measures is evident to not only safeguard domestic industries but also to promote fair trade relations amidst the challenges posed by China’s dominating presence in the global steel market.
Original Source: dialogo-americas.com
