China Bans US Firms, Starts Dumping Probe as Trade Rows Flare

China has hit back at the US and European Union as trade disputes with the West intensify, with bans on US firms linked to arms sold to Taiwan and a probe into imports of a type of plastic.

China’s Commerce ministry said on Monday it will ban some US firms from importing and exporting activities related to China, including one selling arms to Taiwan, and forbid them from making new investments in China.

That move followed news on Sunday that the ministry would launch an anti-dumping probe into plastics imported from the United States, European Union, Japan and Taiwan.

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The investigation will look into plastics known as polyoxymethylene – POM co-polymers, the ministry said in a statement.

These ‘thermoplastics’ are malleable when heated but set in a solid shape when cooled. They can partially replace metals like copper and zinc, and have a range of uses in auto parts, electronics, and medical equipment.

The probe should be completed in a year but could be extended for six months, it said.

US firms banned over arms sold to Taiwan

Meanwhile, the ministry put General Atomics Aeronautical Systems on its unreliable entities list, saying it sold arms to Taiwan, according to a statement. It also included General Dynamics Land Systems.

According to state media, Boeing Defense, Space & Security was also placed on the list.

Senior executives of all three companies are prohibited from entering China, while their work permits will be revoked, along with their visitor and residential status, and the related applications they submit will not be approved, said the ministry’s announcement, according to Xinhua news.

“Such measures are being taken to safeguard China’s national sovereignty, security and development interests,” the Xinhua report said.

“The ministry also said there was evidence that Caplugs of the United States circumvented the unreliable entities list regulations by transferring goods purchased from China to the unreliable entities,” it said.

It urged Caplugs to “take measures as soon as possible to ensure that all relevant goods, technologies and services purchased from China are not transferred to the unreliable entities”, saying that “relevant evidentiary material be submitted to the office of the unreliable entities list as per the working mechanism.”

Otherwise, the office would take measures against it in accordance with Chinese laws and regulations, it said.

EU to assess China probe

The European Commission, which oversees EU trade policy, responded by saying it would carefully study the contents of the copolymers investigation before deciding on any next steps.

“We expect China to ensure that this investigation is fully in line with all relevant WTO (World Trade Organization) rules and obligations,” a spokesperson said.

China’s plastics probe comes amid a broader trade row with the United States and Europe.

The United States on Tuesday unveiled steep tariff increases on Chinese electric vehicles (EVs), computer chips, medical products and other imports.

EU probe into Chinese tinplate steel

On Friday, the European Union launched a trade investigation into Chinese tinplate steel, the latest in a string of EU trade and subsidy probes into Chinese exports.

Most notably, the European Commission launched a probe last September to decide whether to impose punitive tariffs on cheaper Chinese EVs that it suspects of benefiting from state subsidies.

Beijing argues the recent focus by the United States and Europe on the risks to other economies from China’s excess capacity is misguided.

Chinese officials say the criticism understates innovation by Chinese companies in key industries and overstates the importance of state support in driving their growth.