The European Commission has launched an investigation into accusations that China and Taiwan have dumped billions of dollars of stainless steel in Europe, a decision that could reignite trade tensions with Beijing.

The Commission said on Thursday that a complaint received in mid-May from EU steel association EUROFER provided evidence that stainless steel to Europe from Chinese and Taiwanese producers had been exported at unfairly low prices.

“They are flooding the markets which are still unprotected like the EU,” EUROFER Secretary General Gordon Moffat said.

China’s mission in Brussels was not immediately available for comment.

The anti-dumping investigation comes three months after an easing of relations between Beijing and Brussels.

In March, just as China’s Xi Jinping made his first visit to Europe as president, Beijing ended investigations into imports of EU wine and polysilicon and the EU Commission defused a long-running telecoms trade dispute.

Both sides even discussed the possibility of a free trade deal during Xi’s visit to EU institutions in Brussels.

Yet tensions remain. The Commission has 14 ongoing investigations into alleged dumping by, or illegal subsidies for, Chinese makers of products from ceramic tiles to mandarin oranges.

EU imports of cold-rolled stainless steel sheet from China and Taiwan totalled 758 million euros ($1.03 billion) last year, according to EU statistics office Eurostat, a ten-fold increase from the value in 2002.

EU production in 2012, the last year for which data is available, was worth 23.6 billion euros.

EUROFER said European producers had carried out significant restructuring over the past three years to reduce overcapacity and improve their performance, but Chinese manufacturers had built capacity and increased output to a level exceeding domestic demand.

EUROFER said the combined EU market share of China and Taiwan had risen to about 14 percent in April. It also said that Chinese exports of steel as a whole had risen to a record 8.07 million tonnes in May, a 41.5 percent increase in the year to date.

Moffat said EU stainless steel capacity was some 3.5 million tonnes, that of the United States 1.5 million tonnes, while overcapacity in Asia was 6.5 million tonnes.

His association believes duties of up to 20 percent would have to be imposed to counteract the dumping.

The Commission’s anti-dumping investigation will last as long as 15 months, with the possibility of provisional measures being imposed within nine months. Punitive import duties, when imposed, typically last five years. (Reuters)