The Chancellor Philip Hammond last week recommitted the government to backing Market Economy Status for China, despite the fact the move could flood the UK steel market with cheap, subsidised Chinese steel.
Granting China Market Economy Status would weaken or remove trade barriers on the dumping of cheap Chinese steel in the European market, the main market for UK steel businesses. Tariffs for Chinese steel currently stand up to 73.7% in the EU but at more than 500% in the USA. The decision whether to change China’s market status will have to be made in December of this year.
During a visit to Washington Mr Hammond said the UK was ‘bound to’ support the change in status due to ‘certain undertakings we gave to China’.
Steel exports from China have increased by 395% since 2009 and have been blamed for the loss of some 6,000 jobs in the UK.
It is depressingly clear that the Chancellor has prioritised his ‘undertakings’ to China over his commitments to UK steel workers.
The idea that Communist China, whose steel companies are state-owned, is a market economy is obviously absurd. The government has put itself in this ridiculous situation to ingratiate itself to the Chinese. Now it is clear that continuing with this policy will damage British industry they don’t have the courage to stand up to the Chinese and change the policy.
The government should do what is in the national interest and what is common sense, and change its policy of supporting Market Economy Status for China.
Tom yesterday raised the issue with David Davis, Secretary of State for Exiting the European Union, by asking what trade protection measure the government would seek to keep in place if China were granted market economy status.