The United State has imposed new duties that amount to over 500% on cold-rolled steel from China that is used to make washing machines and cars, as a backlash escalated due to a glut of steel from China flooding markets globally.

In a ruling deemed final, the Commerce Department in the U.S. added new anti-subsidy duties that were 256.4% to the already in existence anti-dumping duties that are 265.7% on steel that is produced by companies including Baosteel Group as well as its subsidiaries in China.

Although in the trade adding new tariffs is not uncommon, rulings that have an importance politically could trigger tariffs that are tit for tat.

China steel capacity has increased over the last decade to over 1.5 billion tons, which has sent surplus into the international marketplace as its domestic consumption peaked three years ago.

Beijing calls on the industry routinely to cut its capacity but is unwilling at the same time to allow failure of larger mills, especially those in groups that are state owned that often are the largest employers, borrowers and taxpayers in their particular locality.

Stocks of U.S. beleaguered steel producers soared when the anti-dumping duties initially were announced back in March. The last ruling involves higher duties for anti-subsidy than initially indicated by the commerce dept.

The huge tariffs will act in hardening the desire of the Chinese negotiators to acquire market economy status prior to the end of 2016, as outlined when Beijing joined the World Trade Organization over 15 years ago.

Gaining market economy status protects exports from China from being assessed prices based in third party countries that often times are higher and from being assessed both countervailing and anti-dumping duties.

Pressure from the U.S. and European steel industry has led to opposition politically to automatically giving the status to China.

The steel industry has fears of being swamped further by exports from China, although the consuming industries from construction to automobiles would be benefactors from less expensive steel.

When the delay of 15 years was agreed, China had been unwinding pricing set by the state for a number of industries. However, Brussels and Washington cited a continued role by the government of China in industry and investment to argue that the country remained not a truly market economy.

Cold-rolled steel represents about one tenth of the Chinese steel worth $2 billion that was imported by the U.S. last year.

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