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EU to crack down on dumping, singles out state aid for Chinese industry

The European Commission said new rules have come into force aimed at cracking down on subsidized imports and released a report describing "significant distortions" produced by state interference in the Chinese economy.

The newly approved legislation, which was first proposed in November 2016, will apply to all World Trade Organization members, but the commission's first report for use under the new methodology singled out China, because the bulk of the EU's anti-dumping activity concerns imports from that country.

"Our unshakable and facts-based conviction that trade brings prosperity will not prevent us from defending our workers and companies with all legitimate tools when others do not play by the rules," the commission's President Jean-Claude Juncker said in a statement.

The Chinese state "continues to exert a decisive influence on the allocation of resources and on their prices," the report said, singling out sectors including steel, aluminum, chemicals and ceramics.

Up until now, the Commission had compared the prices at which products are imported to those at which the same products are sold in the country of origin, but as of now it will disregard domestic prices or costs if they are distorted due to state intervention.

The next country report, will focus on Russia, followed by other countries, based on their relative importance in the EU's anti-dumping activity, the commission noted.

"The publication of country reports will help us to put the new methodology into practice," Cecilia Malmström, the commissioner for trade, said.