Trump’s rejection of China’s offer to cut steel capacity is irresponsible: expert

By Chen Qingqing Source:Global Times Published: 2017/8/29 16:23:39

China's determination to slash the capacity glut in the steel industry is an active response to the overcapacity issue that the whole world is confronted with today, and the US government's rejection of its offer is irresponsible, said an industry representative.

The Chinese government has been making concrete progress in cutting steel capacity in recent years, with a reduction of 65 million tons of crude steel capacity in 2016 and a reduction target of 50 million tons for 2017, Li Xinchuang, president of the China Metallurgical Industry Planning and Research Institute, told the Global Times on Tuesday. Li is also the vice president of the China Iron & Steel Association.

"The move has also contributed to the rebalancing of the global steel industry, as the overcapacity is not only an issue for China but also for other countries and regions," he said.

Li made the comments after the Financial Times reported that US President Donald Trump rejected China's offer to cut overcapacity and insisted on imposing tariffs on steel imports from the world's second-largest economy.

One week after the G20 summit in Hamburg in July, the Chinese government suggested slashing steel glut by 150 million tons by 2022. However, Trump rejected the proposal twice, several people familiar with this matter were quoted as saying in the media report.

"Under the Trump presidency, the US is not a responsible country anymore, which has less influence on the global stage," Li said, noting that only blaming China for an issue that the global industry is facing is not a solution.

Instead of working together on dealing with excess capacity, Trump is more willing to put tariffs on steel imports from China, according to the Financial Times.

"The problem the US steel industry is facing today is that US products are far less competitive compared to Chinese ones, and imposing tariffs on imports can't save their industry," Li said.

If Trump insists on import tariffs, China will be fully prepared to "fight back," he noted. "China is the largest trading partner of the US, and a wise politician will not let a small move affect the overall relationship," Li added.

"Trump's reaction to the Paris climate accord shows that US is not a responsible country anymore, and the rejection of the offer to cut excess steel capacity just proved this point again," the Chinese industry representative said.

Though China is the world's largest steel-producing country, less than 1 percent of Chinese steel exports were sold to the US in 2016 because of 20 US trade remedies, according to the US-based think tank the Peterson Institute for International Economics.

For example, the US Department of Commerce said on February 2 that it had determined that imports of Chinese stainless steel sheet and strip should be subject to anti-dumping duties from 63.86 percent to 76.64 percent and anti-subsidy duties from 75.6 percent to 190.71 percent, according to the website of the Chinese government.

Chinese steel exports to the US dropped from 2.21 million tons in 2015 to 0.95 million tons in 2016, the think tank noted.



Posted in: INDUSTRIES

blog comments powered by Disqus