Macroscope | How China and the US are heading for win-win cooperation on one issue, at least – steel

Washington argues that Chinese overproduction in the steel industry has led to price distortions in world markets. While Beijing doesn’t have to agree with that assertion, it does wish to address steel production as it looks to reduce China’s carbon emissions.

No punches were pulled in the annual National Trade Estimate Report from the Office of the United States Trade Representative (USTR), published last week. “Because of its state-led approach to the economy, China is the world’s leading creator of non-economic capacity,” says the report, “as evidenced by the severe and persistent excess capacity situations in several industries, including, for example, steel, aluminium, solar panels and fishing.”

The USTR, led by Katherine Tai, argues that in certain industries, “such as steel and aluminium, China’s economic planners have contributed to massive excess capacity in China through various government support measures. For steel, the resulting overproduction has distorted global markets, harming US manufacturers and workers in both the US market and third country markets, where US exports compete with Chinese exports.”