Latin American countries are following in the footsteps of the United States and Europe by imposing heavy tariffs on Chinese steel imports, which represents a real test of the relationship between the two sides.
A Bloomberg report stated that, due to the global shift towards protectionist measures and the influx of Chinese imports that threaten to push Latin American steel producers out of the market, thus risking the loss of about 1.4 million jobs, Mexico, Chile and Brazil increased customs duties on steel products imported from China. More than doubling, in some cases, over the past few weeks, and Colombia is about to follow suit.
China is the largest buyer of raw materials from Latin America and a major investor in it over the past years. At the same time, the continent provided another market for it to sell its products in light of the strict customs duties imposed by the United States and Europe.
China exports about 10 million tons of steel annually, equivalent to $8.5 billion, to Latin America. That’s a huge jump from 80,500 tons in 2000, according to the Alacero steel association. “This is an important test of China’s interests and intentions, and of Latin America’s ability to challenge an important economic partner,” said Margaret Myers, director of the Asia-Latin America Program for the Inter-American Dialogue. However, challenging China’s dominance in this way could be risky, especially for smaller economies that depend on exports and on Chinese demand for their raw material sales.
