Overcapacity in Steel: China’s Role in a Global Problem

Tags Steel Trade
By Lukas Brun, Duke University Center on Globalization, Governance & Competitiveness

The global steel sector is in crisis. Tens of thousands of Americans have faced layoffs and dozens of steel mills have shut down. China’s massive industrial overcapacity is to blame -— and strong trade enforcement is needed to stop it.

The Takeaways

  1. The world has far more steel than it needs. The global steel market has grown to 2,300 million metric tons (MT) while only needing 1,500 MT to meet global demand. Seventy-five percent of new steel stock since 2000 has come from China.

  2. China admits it has a problem and has repeatedly pledged to cut its steel production. But its steel industry is heavily subsidized and government-run, and leaders are hesitant to act. As a result, China has yet to take significant steps to reduce its steel overcapacity.

  3. Tens of thousands of Americans have faced layoffs because of steel overcapacity and dozens of U.S. steel facilities have closed. Impactful action to enforce America's trade laws is needed to address this growing crisis.

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