At last week's meeting of the G7 group, a common fight against overcapacity in the steel industry was promised.
The problem of global overcapacity in the steel industry was the main topic of discussion even before the meeting. US and EU defined China as a major cause of the global crisis on the steel market, and noted that the import of products from that country triggered the most of the trade defense measures.
European Commission President g. Jean-Claude Juncker stated that the overcapacity of Chinese steel industry is general problem, but Europe simply can not afford to remain defenseless against the distorted market. In Europe, 22 countries are actively engaged in the production of steel and steel products, and each of them has the right to defend their own industry.
At the moment China has the slowest economic growth which has forced its industry to export its surplus products to other markets around the world, which has caused a global decline in steel prices, tension in the markets and an unfavorable attitude towards the Chinese economy are increased. Tense relations caused the European Parliament to vote for rejecting the market economy status for China.
G7 Group announced the fight against global overcapacity
Leading experts of the G7 group promised to fight against global saturation of the steel market, but in their statement they did not point out China as the only culprit, although it is responsible for the production (and consumption) of 50% of the world's steel.
China insists that its exports of steel products does not violate trade rules and that their policy does not encourage exports. They noted that they even suggests reducing tax refunds on exported steel.
"We recognize the negative impact of global excess capacity across industrial sectors, especially steel, on our economies, trade and workers. In particular, we are concerned about subsidies and other support by governments and government-supported institutions that distort the market and contribute to global excess capacity, including such supports granted to overseas expansion of the capacity. We are committed to moving quickly in taking steps to address this issue by enhancing market function, including through coordinated actions that identify and seek to eliminate such subsidies and support, and by encouraging adjustment. In this regard, we are prepared to consult with other major producing countries, utilizing venues such as OECD and other fora, and, as necessary and consistent with the WTO rules and disciplines, to consider the broad range of trade policy instruments and actions to enforce our rights.
Our experts will continue to coordinate actions, working with other countries affected by this issue" – it is writteni n the statement of G7 group.
You can read the whole statement here: G7 Ise - Shima Leaders’ Declaration
US introduces tough measures against China, not even the EU nor Japan producers are spared
The policy of the United States is fully turned to protection of its own steel industry. In the latest set of safeguards, the anti-dumping duties will be paid for particular products from China of up to 522%. This measure reffers to cold-rolled steel for the automotive industry.
New customs duty of 209.97% will be paid on imports of Chinese corrosion-resistant steel. This is just a continuation of a range of procedures indroduced with the goal to get rid of the cheap Chinese competition from the US market with high anti-dumping duties and anti-subsidy measures.
On the other hand the USA is not really fond of EU products either. Products of Italian Marcegaglia will be customs-cleared with 92.12%, while there is an anti-subsidy measure by 241% active against Duferco SA. There are several more investigations that are mainly focused on the European producers from Austria, France, Germany and Italy.
Earlier this month there were the anti-dumping measures of 71.35% introduced on imports of cold-rolled steel from Japan.
These procedures are not surprising because it happens at a time when many feel that the US is not satisfied with the (neutral) work of the World Trade Organization (WTO), so they want to introduce the rules themselves about how and when the protective trade measures against cheaper imports should be activated. Representatives of the EU, Brazil, Japan and other member states believe that the US is trying to undermine the importance of the WTO, its independence, and thus the whole system for resolving international trade disputes. It seems that the United States tries to restrain its trade deficit in every possible way.