How China Destroyed the US Steel Market

How China Destroyed the US Steel Market

We keep hearing about the Chinese government’s steel dumping lately, but the truth of the matter is that China has been dumping not only its excess steel, but also paper, aluminum, glass, rubber, chemicals and other different commodities worldwide for more than a decade now. The majority of steel mills in China are subsidized by the state, the Chinese government, with absolutely no regard for international trade rules, systematically overproducing steel and artificially lowering its price. Currently, China’s steelmaking capacity and production represents the highest capacity in the international market, the US, EU, Japan and Russia all together having no reasonable chance at fair competition. And although the entire world is negatively affected by China’s overproduction of cheap steel, alas, America may be the country that will end up suffering the most, simply because we buy the most.

Even with all of its public promises to put a damper on its excessive steel production, China keeps exporting over the amount of global steel capacity, forcing mills in the US to close, leaving thousands and thousands of steelworkers without a job, deliberately destroying the lives of thousands of families and entire communities that depend solely on the steel industry to make a decent living and to prosper. Moreover, even at a loss, and even with its debt getting higher and higher due to the costs of the expensive equipment it needs in order to keep overproducing high-end products, China won’t stop its sabotage of the US and European steel markets. And this is not only a threat to the US economy, but also to our national security. Steel is quintessential to our military forces, and extremely important in case of potential natural or man-made calamities. If we will end up depending on China to equip our army, or to rebuild our architecture, we will be putting ourselves in an incredibly fragile position. And such an outcome is not one of those worst case scenarios things, it’s what actually will happen if the international steel market keeps to its current course.

In the United States, we undoubtedly produce the best steel that we could use, steel that is made in cost-efficient mills with the help of the most qualified, competent and able workers. For this reason, we will never be able to overthrow the devastating import surge we see in the US steel industry today, nor to bring down China’s ever-growing production capacity.

Nonetheless, we would still have a fighting chance if Congress and the US Trade Representative were to take drastic, yet necessary, measures. If US law would deem China as unqualifiable in our market economy, and if real steps would be taken in order to stop the unreasonable and immoderate Chinese trade practices, we will be able to help diminish international overcapacity, and restore the need for US-based steel companies.

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