The European Commission has hiked 'anti-dumping' duties on imports of hot-rolled flat steel products from China already in place. The decision has angered Beijing, which has promised to respond.
The duties on the Chinese steel products have been increased to 22.6 percent from 13.2 percent following a complaint from EU producers ArcelorMittal, Tata Steel and ThyssenKrupp.
According to the European producers, China sells steel at a loss due to overcapacity.
At the beginning of 2016, China pledged to cut 150 million tons of annual production capacity over the next five years. However, capacity rose last year.
Beijing has said steel overcapacity is not only a Chinese concern but a global one.
The Commission said a similar investigation into Brazil, Iran, Russia, Serbia, and Ukraine is still in process and would continue for six months.
"The decision not to impose provisional measures for imports from Brazil, Iran, Russia, Serbia and Ukraine does not prejudge the final outcome of that investigation," a Commission spokesman said, as quoted by Reuters.
China has responded angrily to the decision. The Ministry of Commerce said it came from "unfair, unreasonable" use of the 'surrogate country' prices references method.
When China joined the World Trade Organization in 2001, it agreed to let WTO members treat it as a non-market economy when assessing dumping duties for 15 years. The surrogate is a market economy country that is at a level of economic development comparable to that of the non-market economy country.
The clause expired on December 11 last year but is still being used when assessing Chinese steel exports, according to Beijing.
"The Chinese side urges the EU to fully carry out its treaty obligations under the WTO, stop using the 'surrogate country' method, and treat Chinese companies fairly, justly and without discrimination," said Wang Hejun of the Chinese Ministry of Commerce, Trade Remedy and Investigation Bureau in a statement.
Brussels' decision was based merely on accusations and speculation, said Wang.
"China urges the European side to correct such a mistake as soon as possible," he said. The Chinese government will take "necessary measures" to protect the legitimate interests of "seriously" hurt domestic firms, Wang warned.