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Letter to the Editor: China steel overcapacity complaints problematic

Keywords: Tags  letter to the editor, Thomas Graham, T.C. Graham Associates, steel overcapacity, currency manipulation, subsidies


To the Editor:

Speakers at AMM’s Steel Success Strategies XXVIII conference in New York June 17-19 who dealt with steel policy issues landed on one theme: overcapacity. It was no surprise to anyone that the finger-pointing all centered on China. This was a very typical steel meeting, and all followed the script as if it had been prescribed.

Whatever our complaints aimed at China, it should be apparent by now that there is no quick fix available. If we are to make any tangible progress, it would have to be achieved through negotiation. We would go to the table with three accusations:

1. China prohibits foreign ownership of protected industry.

2. China manipulates its currency.

3. China is a non-market economy and steel is a subsidized industry.

After listening politely to our catalog of complaints, China would respond:

1. The United States has vetoed China’s efforts to invest in ownership of U.S. businesses.

2. The United States certainly manipulates its currency.

3. The United States is a non-market economy that subsidizes its steel industry (the People’s Republic of Arkansas and Big River Steel LLC).

Our negotiators would have a difficult time!

THOMAS C. GRAHAM
T.C. Graham Associates


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