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China Trade Fight
China Cheats on Steel Cuts, Says Greenpeace

Here is a story to make Donald Trump’s blood boil: not only has China been dumping its excess steel in world markets, roiling the U.S. steel industry, it has apparently been cooking the books while it pledges to reduce overcapacity. Financial Times:

China’s cuts in steel capacity last year primarily targeted mills that were already idle, doing little to reduce the exports that have fuelled trade tensions or address the blight of toxic smog, a study has found. Beijing has trumpeted its success in shutting up to 85m tonnes of capacity in 2016.

However, only about a third of that was producing steel, and the closures in operating capacity were outpaced by new plants or mills that restarted as prices rose, according to the study commissioned from consultancy Custeel by environmental campaign group Greenpeace.

Strong Chinese steel exports as domestic consumption peaks have stiffened opposition in Brussels and Washington to recognising China as a market economy under World Trade Organization rules — a status that would make it more difficult to bring anti-dumping cases. Beijing has countered by defending its efforts to cut excess capacity.

Much of Donald Trump’s appeal lay in his message that China was ripping the United States off—that the global trade agenda implemented by past administrations was being exploited by canny actors in Beijing to sell out the American worker. One need not count Trump as an economic sophisticate to concede that he does have a point, and the ongoing Chinese steel saga is exhibit A.

The Chinese steel glut has been a running story for some time now, but the Greenpeace report suggests that Beijing is not acting in good faith to fix the problem, instead fudging the numbers in a disingenuous effort to achieve market economy status in the WTO. And that is a potent illustration of a common Trump talking point: that efforts to integrate China into a rules-based trade order have instead allowed it to game the system, growing rich at the expense of the U.S. while reaping the benefits of the international trade order established by Washington.

Stephen Bannon was once quoted as saying that “The globalists gutted the American working class and created a middle class in Asia.” The 2016 election proved that Trump could channel such grievances into a powerful political force. Trump is not the first politician to care about China’s trade practices; both the Bush and Obama administrations flirted with protectionist impulses and even imposed tariffs on Chinese steel. But Trump was the first to fully embrace protectionism, and gestures like the Carrier deal show that he intends to make high-profile actions to show his support for U.S. workers. If Trump hopes to take Beijing to task for unfair trade practices, then—and everything from his inaugural address to the composition of his trade team suggests that is the case—China’s steel industry could become an early target.

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  • rheddles

    It was a terrible mistake to allow China and Russia to join the WTO before they had become liberal polities. Rather than accelerating their progress toward liberalism, membership has made the illiberal regimes richer and more able to resist change. This is the aspect of “globalism” that Trump must change.

  • Andrew Allison

    “One need not count Trump as an economic sophisticate to concede that he does have a point, and the ongoing Chinese steel saga is exhibit A.” The dig is beneath you.

    • f1b0nacc1

      You are far too generous…they can (and do) go a lot lower than this….grin…

      • Andrew Allison

        Yes, they’re embarrassingly consistent. I’d like to think that it’s juveniles like Willick, et al., but even the good Professor seems to have difficulty coming to terms with the fact that President Trump is the people’s choice and that disrespecting him is disrespecting them. Like you, I held my nose and voted for ABC but, despite the hysterics, Trump appears to be doing reasonably well. Gaining control of the treasonous so-called “intelligence” establishment will be a challenge, as will it will be with the pantywaists at State. He also appears to grasp that the FAA is beyond redemption. Fingers crossed.

  • FriendlyGoat

    Perhaps we would benefit from a comprehensive inventory of what has been built or used in the USA from Chinese steel and who bought it.

  • ——————————

    Time to crush the paper tiger with steel….

  • Jacksonian_Libertarian

    Faced with a choice between the lying Greenpeace and the lying Chinese, I’m hoping for a comeuppance for both of them.

  • Lophs

    I wouldn’t doubt it, even the Communist party probably doesn’t really know. The system is set up for local party officials to fudge their numbers for their exclusive advantage. If the Communist party actually push legislation to reduce overcapacity, local party official will fudge their numbers to appear to be in compliance while at the mean time ignoring Beijing b/c they local party official of province exhibit A worries about the social disorder resulting from less orders for the factories that employ so many people.

    The central government knows this of course, and they don’t fault the local party officials. Or if they do, local party official just bribes their way out. In fact there isn’t probably any accurate statistics available b/c it would embarrass everyone involved. The whole thing is a collective madness. Everyone knows that they can’t continue like this. This overcapacity is funded on debt and it is a sinkhole b/c they are non money losing entities, but they are too important to shut down b/c employs so many many people.

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