Chinese producers and six other nations that are selling steel in the American market at an unfairly low price will be imposed a tax as high as 266 percent on the price, the Commerce Department revealed on Tuesday.

In a preliminary decision this week, the US government said it will be charging tariffs as much as 266 percent on imports from the mainland, while products from Brazil, India, Japan, Russia, South Korea and UK will also be taxed. Brazilian producers will allegedly be charged a 39 percent penalty, while South Korean with 6.9 percent.

Like Us on Facebook

Since December last year, this is the second time that foreign steel producers (including Chinese mills) have been penalized by the American government for allegedly selling metal at an unfairly low price (referred to as dumping), according to Bloomberg.

Since June 2015, US steel producers have been filing lawsuits against their foreign counterparts on the grounds of unfair subsidies and illegal trade practices. They claim that foreign steelmakers are dumping and subsidizing four different steel products.

In December, the US government discovered that countries including China, South Korea, Italy and India had dumped corrosion-resistant steel. As a result, US authorities imposed a 256 percent tax on imports from the mainland. Other taxes were between 3 and 9 percent.

According to Bloomberg Intelligence analyst Caitlin Webber, the tariffs may not be satisfactory for domestic producers. Officials previously found that cold-rolled, corrosion-resistant and hot-rolled steel from China and other traders had been wrongfully subsidized.

"The dumping rates for South Korea... were far below what the U.S. industry alleged," she said. "Apart from the prohibitive Chinese rates, this is the second disappointing dumping finding in the U.S. industry."

Based on the data compiled by Bloomberg from the US Census Bureau, cold-rolled steel imports plummeted by 9.4 percent to 2.43 million tons last year. 

Tagssteel market, china, steel