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Leader_The EU unwisely slides towards protectionism

Worries about the effect of trade and globalisation on workers are a staple of politics in the US and Europe. So it is perhaps unsurprising that the EU, with an eye on China and particularly on steel, is planning to make it easier to block subsidised or dumped imports with emergency tariffs.

That it is unsurprising does not mean it is wise. There is no doubt Chinese production, thanks to state-subsidised overcapacity, is pushing down the global price of steel. Yet the advanced countries should accept that putting up barriers simply disadvantages other industries and interrupts the vital global supply chains on which modern trading economies depend.

The EU’s probable change of policy is designed to sidestep a looming problem of whether China should be accorded “market economy status”, which would make it harder to impose antidumping or countervailing (anti-subsidy) duties on Chinese imports. When assessing such duties on a non-market economy, the EU is permitted to use costs from a supposedly analogous third country to calculate how big the penalties can be.

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