Styrene is the building block of many plastics, used to make foam packaging and many disposable plastics

Beijing (AFP) - Trade tensions between the world’s two largest economies continued to simmer as Beijing took aim at imports of a key chemical from the United States, the latest move in a growing standoff between the pair.

China’s Ministry of Commerce announced Tuesday it had found dumping of styrene imports from the US, Taiwan and South Korea in an initial ruling of an ongoing trade investigation into the chemical.

Dumping, or selling goods at unfairly low prices abroad, can undercut domestic markets at the expense of local industries.

“Mainland China’s styrene industry has suffered substantial harm,” China’s commerce ministry said in a statement, adding that dumping was the cause of this harm.

The initial ruling called for importers to place anti-dumping deposits of five to 10.7 percent with China’s customs administration.

Those deposits will be applied to tariffs if the commerce ministry decides to levy duties in a final ruling.

Styrene is the building block of many plastics, used to make foam packaging and many disposable plastics.

Last year, China imported 3.2 billion kilogrammes of the chemical from the US worth more than $4 billion.

The measures come a month after the Trump administration launched new tariffs on Chinese-made solar panels and washing machines.

Those tariffs followed a raft of new trade cases against China during Trump’s first year in office, which have rattled Beijing.

Last week, China expressed concern over the ramping up of trade investigations by the US.

Analysts say Beijing is signalling it will take action in a tit-for-tat trade war.

Last week it launched an anti-dumping investigation into sorghum imports from the US, worth almost $1 billion last year.

That was a sliver of the $14 billion in US soybean imports, which a Chinese commerce ministry spokesman also hinted could be in Beijing’s crosshairs.

Soybeans are America’s largest export to China.

The Trump administration has put levelling the trade playing field near the top of its agenda for Sino-US relations.

But in Trump’s first year as president the trade deficit swelled to a record high of $375.2 billion by the US’s counting.