Steel tariffs are necessary because China will not trade fairly

In recent weeks, there has been much debate about President Trump’s imposition of tariffs and quotas to address unfair steel imports. President Trump’s actions were necessary because many countries use a series of subsidies and export steel throughout the world.

About 35 million net tons of steel were imported into the United States last year, more than 100,000 tons per day.

In the U.S., last year imports accounted for 27% of the finished steel products market.

Global steel overcapacity fueled this increase in imports. Which led to the closing of steel factories and the loss of jobs. And China is the biggest culprit. China produces half of the world’s steel, increasing its capacity by approximately 600% since 2000.

These significant increases in capacity have occurred despite the Chinese government’s repeated declarations, commitments and proclamations. They aim at restructuring or reducing steel production capacity.

The steel industry is threatened and new tariffs and quotas steel

While direct imports from China have been reduced in recent years, China’s increased steel production and its exports to third countries continue to threaten the health of the U.S. industry. and finally national security.

Unlike the U.S., where companies exist to make a profit, state-owned companies in China and elsewhere exist primarily to employ people. As a result, they produce a massive amount of steel. Which is unused on domestic markets and then thrown all over the world.

In some cases, these exports force other countries to export their own steel production. Which would normally be used internally. In other cases, the steel that comes from China is transported to another country. Or processed in another country before being exported to the U.S.

For example, steel ingots from China are processed in Turkey into long products, which are then exported to the United States, while rolled steel is made into pipes in Korea, which are, according to the Commerce Department, „dumped” on the american market.

Considering previous unsuccessful attempts to solve the problem, President Trump initiated an investigation. Pursuant to Section 232 of the „Trade Expansion Act of 1962”. And the Department of Commerce finally found that steel is so critical to national security. As if the flood supported by subsidized imports threatens the industry.

Since neither the negotiations nor the targeted responses successfully solved the problem, President Trump implemented a more efficient solution. Imposing quotas or tariffs on most trading partners.

The actions of the president lead to an increase in domestic production

We are just starting to see the positive results of the president’s actions – the increase in domestic production, steel companies investing more in communities across the country, and jobs in the field are being created for the first time in years.

The president’s actions should have time to work, while the administration continues to talk with North American Free Trade Agreement (NAFTA) partners and others about rebalancing trade relations.

Article based on the statements of Thomas J. Gibson, president and CEO of the „American Iron and Steel Institute”, an association of steel producers in North America.

Article source: http://thehill.com/opinion/finance/396089-steel-tariffs-are-needed-because-china-wont-trade-fairly