China will not curb incentives on steel exports despite a sharp increase in tariffs by U.S. authorities.
Reuters reports that China's finance ministry instead vowed to "continue to implement a tax rebate policy on steel exports."
The Chinese government announced the rebates in an effort to alleviate its domestic oversupply of steel, but Western steel producers — already hammered by record Chinese imports last year — argued that the country was effectively dumping undervalued steel on the global market.
In response, the U.S. Commerce Department imposed duties of more than 500 percent this week on Chinese-made cold-rolled flat steel, which is used in construction, appliance manufacturing and the auto industry.
Although it would sharply increase its price in the U.S., the country accounts for just 2 percent of exports from China, which is by far the world's largest steel producer.
China nonetheless responded with "strong dissatisfaction" at the U.S. ruling as trade tensions between the world's two largest economies continue to rise. The struggling global steel market, meanwhile, is expected to be featured at the upcoming G7 summit in Japan.
Chinese authorities plan to spend billions to protect against unrest as it restructures its state-owned enterprises; the nation's steel capacity is expected to be reduced by up to 150 million tons in coming years.