Steel Makers Report on China Trade Policies

The American Iron and Steel Institute and the Steel Manufacturers Association released a study Tuesday claiming a negative impact of China's economic policies on U.S. and world economies.

Entitled "Rebalancing the U.S.-China Economic Relationship: A Steel Industry Perspective," the study examines Chinese industrial policies. The study says those policies include "manipulating the value of its currency, subsidizing export-oriented industries, and failing to enforce environmental laws." The study says such actions give China’s exports an "artificial advantage in international competition,"

The study also examines in detail the impact that these policies have had on the United States, the two co-sponsors said. Although the study focuses on the steel industry, the AISI and SMA said that its conclusions are "generally applicable to the U.S. manufacturing sector."

"The study shows that China is violating the basic rules of the international trading system," said Thomas J. Gibson, president and CEO of AISI. "International trade is supposed to be based on comparative advantage and genuine factors of efficiency and competitiveness. What China is doing is more like old-fashioned 18th century mercantilism. Through its policies of government ownership and subsidies, weak and inadequately enforced environmental rules and its manipulation of currency, border measures and raw material markets, the government of China has provided Chinese exports a tremendous artificial edge in world markets, at the expense of the United States and other countries. For the U.S. economy, the effects of allowing this 'China Inc.' system to continue include a $300 billion annual bilateral trade deficit, over 1.5 million lost manufacturing jobs since 2001 and a lowering of our annual GDP by as much as $500 billion."

Source: JOC