The Global Forum on Steel Excess Capacity unveils a 52-page report detailing what we already know.
Well guys, representatives from steelmaking nations all gathered in Berlin today for the second meeting of the Global Forum on Steel Excess Capacity. And there have been some exciting developments!
According to a 52-page report issued by the forum, there is in fact global steel overcapacity — and it’s causing problems!
As we outlined on the blog on Wednesday, the Global Forum on Steel Excess Capacity was formed in 2016 to find solutions to the global steel glut. At the time, international leaders pledged quick and effective action to address steel overcapacity and stabilize the international market.
When the Obama administration sent its team to Berlin for the first meeting in December 2016, nothing much got done. But this time around it was the Trump administration’s turn, and considering the president made addressing the steel overcapacity crisis a priority during the campaign and his first few months in office, some had believed his team would be tougher.
The results from Thursday’s meeting are disappointing, to put it mildly. Along with acknowledging the crisis, member countries agreed that there is a need to dismantle market distorting subsidies and ensure a level playing field to tackle the problem. But nothing else was agreed to beyond that.
As AAM President Scott Paul posted on Twitter, the 52-page document is “about as useful as a TPS report.”
The United Steelworkers were even harsher than Paul, noting that the global forum might view the report as a victory “but for workers in the steel sector in the United States, it is just another sign that political leaders are fiddling while Rome burns.”
“The new report fails to identify specific disciplines, timelines or targets for resolving the problem,” the steelworkers said in a statement. “A real plan for action is the only thing that will work.”
American Iron and Steel Institute President and CEO Thomas Gibson, whose organization consists of member companies that represent over 75 percent of U.S. steel capacity, said in a statement that while the report “properly focuses on the need for government to eliminate market-distorting subsidies and other measures that contribute to excess capacity… these and the other policy recommendations presented by the Global Forum will only be meaningful if they are actually implemented by governments.”
As we’ve noted many times here, China is driving this problem. Excluding China, the world’s steelmaking companies are producing about as much steel as they can use. But China’s state-run economy makes far more steel than it needs, then dumps it into the global market priced far below fair market value.
That is what is driving the global steel overcapacity crisis.
Don’t be fooled — more meetings and more meaningless reports is exactly what China wants. It is hoping to drag this process out long enough to drive the rest of the world’s steelmakers out of business and give itself a monopoly on the global market.
America needs to maintain the ability to make its own steel, not just to support the hundreds of thousands of jobs supported by the industry but also to safeguard our national security and critical infrastructure.
The results of Thursday’s forum show that the rest of the world isn’t willing to do what is necessary to truly hold China accountable and address this crisis. The United States needs to step up.
President Trump and his team have an opportunity to do something RIGHT NOW by finally unveiling the findings of the long-awaited national security investigation into steel imports and taking appropriate action. Trump pledged to release the “Section 232” report by July 1 but has yet to do so, and the delay has led to a 20 percent increase in steel imports.
“Steel workers, their families and communities across the country are still waiting for action,” the Steelworkers said. “The Global Forum’s report makes clear that the U.S. must unilaterally act to protect our national security.”
Added Gibson: “Continued aggressive enforcement of the full range of U.S. trade laws, including Section 232 and our antidumping and countervailing duty laws, is critical to ensure that the U.S. industry is not further damaged by unfair trade in steel.”