U.S. Officials to China: Stop Producing So Much Steel: AAM Statement

Leaders discuss overcapacity at U.S.-China Strategic and Economic Dialogue

U.S. Treasury Secretary Jack Lew asked Chinese leaders to cut excessive steel overcapacity during the U.S.-China Strategic and Economic Dialogue on Monday. The United States also encouraged Beijing to build its economy with the use of fiscal and lending policies that strengthen consumer demand rather than ongoing overproduction.

Said Alliance for American Manufacturing (AAM) President Scott Paul:

"Today’s message can’t come soon enough – China needs to stop overproducing steel.

“China’s massive overcapacity has corroded our steel sector, and I commend Secretary Lew’s strong push to end the global steel glut, but I’m not placing my hope in China. For years Beijing has promised to stop overproducing, but every year those promises fall flat.

“China’s production continues to grow and nearly 15,000 U.S. steelworkers are currently paying the price with their jobs. It is clear that China can’t be believed on its word alone and it is time for Washington to hold Beijing accountable for its actions by enforcing fair trade laws and demanding an end to China’s industrial overcapacity.”

MORE: China's broken promises to stop overcapacity:

  • In 2009 China announced plans to cut its steel production from the previous year’s output of 521 million tons to 460 million. The plan was to let production rise from that 460 million-ton baseline to 500 million tons in 2011. Instead production jumped to 577 million tons in 2009, and passed 700 million tons in 2011.
  • China announced in 2010 its plans to stop any new steel capacity expansion projects. China’s existing capacity that year was already at 800 million tons. But by 2011, an additional 60 million of capacity per year had been installed.
  • The Chinese government specifically identified excess steel capacity as a problem that needs to be addressed in its Five Year Plan released in 2011. But in 2012, China added another 96 million tons worth of annual capacity.
  • In 2013, the Chinese government again acknowledged its steel capacity problem and laid out plans to dial it back. But by 2014, another 70 million tons of capacity were online.
  • In 2015 alone, China produced over 800 million tons of steel – roughly half the world’s steel production.

Read more: Chinese Steel Overcapacity – A Legacy of Broken Promises, United Steelworkers (USW)