Posts Tagged ‘steel glut’

US eyes heavy tariffs on China, Russia to counter steel, aluminum glut

February 16, 2018

AFP

© AFP | US Commerce Secretary Wilbur Ross believes that cheap steel and aluminum imports from places like China and Russia “threaten to impair our national security”

WASHINGTON (AFP) – The US Commerce Department said Friday it recommended imposing tariffs on China, Russia and other countries to counter a global glut in steel and aluminum which it says threatens national security.In a report to President Donald Trump, Commerce Secretary Wilbur Ross includes among the options a nearly 24 percent tariff on all products from China, Russia and three other economies.

Other options would impose either high tariffs or quotas on steel and aluminum imports.

The findings are part of an investigation into the impact of the oversupply of steel and aluminum, and whether it undermines US national security.

In each case “the imports threaten to impair our national security,” Ross told reporters in a conference call about the so-called Section 232 investigation.

China and Russia are primary targets, but many other countries are included in the recommended sanctions, which are sure to spark fears of a global trade war if implemented.

Ross said the sanctions were designed to be broad to prevent targeted countries from circumventing the limits by shipping through a third country.

He said “serial offenders can evade these orders by transshipment through another country.”

For steel, Ross recommended three possible options: a 24 percent tariff on all steel from all countries; a 53 percent tariff on imports from 12 countries, including China, Russia and Brazil; or a quota on steel from all countries.

For aluminum, he recommended either a 7.7 percent tariffs on the metal from all countries; a quota for all countries; or, perhaps the most shocking of all the options, a 23.6 percent tariffs on imports of all products from China, Russia, Hong Kong, Vietnam and Venezuela.

Ross submitted the two reports to the White House in late January.

Trump has until mid-April to decide on any possible action, which he acknowledged likely would prompt action by US trading partners in the World Trade Organization.

US industries have urged the administration to take care since high import tariffs would raise the cost of supplies for major industries.

But Commerce said the goal of the measures is to boost domestic aluminum and steel prodcution.

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Manufacturing CEOs go to President Trump for help in their fights against China — Trump’s Collision with China “Almost Inevitable”

January 24, 2017

By   CNBC

On his first full day in the Oval Office, President Trump gave face time to a group of major CEOs, and several had something in common: problems with China.

The meeting Monday came after an early morning tweet from the President announcing it. Without any details, most of the press was left guessing as to the attendees. Before the meeting, a stream of 12 CEOs from manufacturing companies walked into the White House.

Busy week planned with a heavy focus on jobs and national security. Top executives coming in at 9:00 A.M. to talk manufacturing in America.

Here’s the final White House list of the CEOs that met Trump:

“The scale of the challenge is pretty large,” says Scott Paul, president of the Alliance for American Manufacturing, highlighting the technological and trade-related impediments to boosting manufacturing jobs in America.

Five of the 12 CEOs lead companies that are facing serious headwinds from China: U.S. Steel, Arconic (formerly Alcoa), Whirlpool, Corning and Under Armour.

“It’s a great new dawn,” Ed Rogers, chairman of the BGR group, a lobbying firm, told CNBC’s “Squawk on the Street.”

U.S. Steel: The company has been hit by a China-driven steel glut, and last April it accused Chinese government hackers of stealing proprietary technology.

1 year U.S. Steel (X) stock performance

Arconic (formerly Alcoa): The company has reeled under cheap Chinese aluminum supply for more than a decade. Chinese production and a strong dollar cut aluminum prices by 10 percent in 2015, the same year China produced 55 percent of the world’s total supply. In fact, China’s cheap exports drove CEO Kleinfeld’s decision to split the company into two. The Obama administration lodged a WTO complaint into China’s subsidies for its aluminum industry.

1 year Alcoa (AA) stock performance

Whirlpool: The largest seller of household appliances has accused rivals some rivalsof making washing machines cheaply in China and selling them in the U.S. In response, the Commerce Department imposed anti-dumping tariffs on large residential washing machines sold by LG and Samsung but manufactured in China.

1 year Whirlpool (WHR) stock performance

Corning: The maker of specialized LCD-glass screens reeled after China imposing anti-dumping tariffs on the company in the past.

1 year Corning (GLW) stock performance

President Donald Trump (C) delivers opening remarks during a meeting with (L-R) Wendell Weeks of Corning, Alex Gorsky of Johnson & Johnson, Michael Dell of Dell Technologies, Mario Longhi of US Steel, and other business leaders and administraiton staff in the Roosevelt Room at the White House January 23, 2017 in Washington, DC.

Getty Images
President Donald Trump (C) delivers opening remarks during a meeting with (L-R) Wendell Weeks of Corning, Alex Gorsky of Johnson & Johnson, Michael Dell of Dell Technologies, Mario Longhi of US Steel, and other business leaders and administraiton staff in the Roosevelt Room at the White House January 23, 2017 in Washington, DC.

Under Armour: Tech website Mashable was the first to report on a Chinese rip-off of Under Armour: “Uncle Martian.” A Chinese disrespect for copyright laws is a major frustration facing American companies.

Dow Chemicals: Despite a large presence in China, Dow’s future holds intense competition from China National Chemical (ChemChina), a Chinese-owned chemical company, merging with .

U.S. – China Strategic & Economic Dialogue: China Pledges to Cut Steel Glut, Avoid Race to Devalue Yuan

June 7, 2016

The Associated Press

China promised to rein in production of steel that is flooding global markets and work with Washington to enforce North Korea nuclear sanctions, as high-level talks between the superpowers ended Tuesday with no announcements of progress on simmering disputes in the South China Sea.

Envoys from the two sides also didn’t agree on what to do about China’s aluminum producers, among the bloated industries Washington and other trading partners complain are dumping exports too cheaply, hurting foreign competitors and threatening jobs.

The two-day annual Strategic & Economic Dialogue concluded with both sides acknowledging disagreements on significant issues including human rights. But the world’s biggest economic powers repeatedly stressed their desire for friendly, productive relations.

A labourer walks on coils of steel wire at a steel market in Shenyang, Liaoning province, China. Slowing construction and industrial activity has hit Chinese steel demand and prices hard in the past few weeks. (SHENG LI/REUTERS)

A labourer walks on coils of steel wire at a steel market in Shenyang, Liaoning province, China. Slowing construction and industrial activity has hit Chinese steel demand and prices hard in the past few weeks.
(SHENG LI/REUTERS)

“While efforts over the past several days cannot resolve our concerns, they do represent real progress,” U.S. Treasury Secretary Jacob Lew said.

For its part, Washington vowed to boost its savings rate and investment, especially in infrastructure. The American side said it would pursue “fiscal sustainability,” a reference to narrowing its yawning budget deficits.

China’s commitment to persist with reforms to make its economy more balanced included shrinking its vast steel industry and opening its financial sector wider to U.S. companies, Lew told reporters.

Commercial tensions are growing. The U.S. and other countries feel Beijing has responded to a glut of unneeded supply by encouraging low-priced exports.

China’s government announced plans this year to shrink state-owned steel and coal producers at a cost of millions of jobs. But that will take time, and the flood of low-cost steel has prompted protests by European steelworkers and was cited by Tata in its decision to sell money-losing British operations that employ 20,000 people.

Washington has imposed anti-dumping tariffs and is investigating if Chinese mills are using stolen U.S. technology. The European Union has launched its own probe into possible dumping.

Lew cited some action from Beijing to address the concerns. Beijing, he said, promised to avoid policies that might encourage steel production growth and to wind down financially moribund “zombie companies. He said Chinese officials also agreed to cooperate in a possible global steel forum to discuss industry issues.

There was no indication, however, that Beijing would change the pace of its overhaul, highlighting the limited impact of U.S. pressure on basic Chinese policies.

On Monday, the Chinese finance minister, Lou Jiwei, said expectations that Beijing could abruptly transform its industry were unrealistic.

“To some extent, the worst is over,” said Tian Yuan, an economist for the China Institute for Strategy, a Beijing research center. He predicted continued progress by Beijing to reduce excessive capacity.

Beijing also agreed for the first time to allow U.S. banks to join the growing number of institutions outside China that are allowed to clear transactions denominated in the country’s tightly controlled currency, the yuan.

And Chinese officials indicated no push for a sustained weakening of the yuan against the dollar, Lew said, adding that they also indicated they wouldn’t engage in “competitive devaluations” or use the exchange rate to help China’s exporters.

On the strategic side, U.S. Secretary of State John Kerry pointed to scant concrete progress on sensitive issues ranging from maritime security to North Korea.

A joint statement didn’t even mention the South China Sea, where China and its neighbors have conflicting claims to territory and possible oil and gas resources.

“We didn’t agree on everything,” Kerry said. Still, the top American diplomat emphasized the importance of cooperation, saying the U.S. and China had probably “the most consequential bilateral relationship of nations in the world.”

Chinese President Xi Jinping echoed that theme.

“Our common interests outnumber our differences,” Xi told Kerry, Lew and other U.S. officials. “We need to respect each other’s core interest and major concerns, and on that basis try to work together to seek solutions.”

On North Korea, Kerry said U.S. and Chinese experts would study how to enforce U.N. anti-nuclear sanctions approved in response to the North’s development of nuclear weapons and missile technology.

In the South China Sea, Kerry appealed for negotiations and “a peaceful resolution based on the rule of law.” Just last weekend, Beijing said it would ignore an upcoming international arbitration decision in a dispute with the Philippines. China also has conflicting claims with Vietnam, Malaysia, Brunei and Taiwan.

State Councilor Yang Jiechi said Beijing wants to solve disagreements through negotiation among “the countries involved.” That would exclude the United States.

“China has every right to uphold its territorial sovereignty,” Yang said.

Human rights also were a focus.

American officials said significant time was devoted to a new law on nongovernmental organizations, which could severely limit the operations of foreign business chambers and groups helping lawyers and activists in China.

It puts foreign NGOs under direct police supervision and requires them to state where their money comes from and how it is spent. Those deemed to be subverting the state would be banned.

Kerry said he received assurances from Xi that China would remain open for business, and would continue opening itself up to the outside world. “We have to sort of show some patience,” the secretary said.

Yang said the law would protect the “legal rights and interests” of nongovernment groups.

“As long as they abide by Chinese laws, the activity of foreign NGOs in China will not be affected,” he said.

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