US actions to protect steel industry do not address the root of the problem

US efforts to protect its steel industry will not address the sector's fundamental problems that stem from past protectionist measures, the Chinese Ministry of Commerce said. The comments were posted on the ministry's website in line with a decision made Friday by the US International Trade Commission to continue probing imports of some steel products from 12 countries, including China and South Korea.

The United States hit Chinese steelmakers with final import duties of 522 percent on cold rolled steel on Tuesday after finding the products were sold in the US market at below cost and with unfair subsidies. However, the Chinese statement said that 30 years of protection and subsidies are distorting the US steel market, resulting in a loss of competitiveness. In addition, most of China's steel exports to the US represent items that the US does not produce and therefore do not result in real harm to producers, the statement said.

The global steel industry is currently facing difficult times amid overproduction, and countries need to work together to tackle this problem rather than resort to protectionist measures, the ministry said in a statement. China, which accounts for half of the world's steel production, is under fire after its exports hit a record 112 million tonnes last year. Competitors claim that Chinese steelmakers have cut them in domestic markets.

In the four months of 2016, China's steel exports grew by almost 7.6 percent at an annualized rate to 36.9 million tons. China's own steel sector is facing deep challenges following a slump in real estate and construction. The nation has pledged to shut down a significant chunk of excess production capacity and lay off workers, but some analysts say policy responses have yet to be taken. The ministry recently confirmed that export tax breaks for some steel exports may remain the same.