Washington: The US has lashed out at China for the ongoing global crisis in the steel market and warned of trade action to avoid harm to their domestic industries and workers.
In a statement, Secretary of Commerce Penny Pritzker and US Trade Representative Michael Froman said: “Unless China starts to take timely and concrete actions to reduce its excess production and capacity in industries including steel, and works with others to ensure that future government actions do not once again contribute to excess capacity, the fundamental structural problems in the industry will remain and affected governments including the US will have no alternatives other than trade action to avoid harm to their domestic industries and workers”.
Pritzker and Froman issued the statement after the conclusion of high-level meeting in Brussels on excess capacity and structural adjustment in the steel sector.
“The steel market is in a state of crisis resulting, primarily, from massive global excess capacity, much of which has stemmed from trade distortive government policies and actions,” they said in the statement.
In an effort to address this situation, ministers, vice ministers and senior level officials from all over the world including the US travelled to Brussels for the OECD High-Level Meeting on Excess Capacity and Structural Adjustment in the Steel Sector.
“Most of these countries many of them major steel producers share the view that excess capacity, and government measures that give rise to it, underlie the current crisis. These countries came to Brussels prepared to deal seriously with these issues,” they said.
“Unfortunately, other countries – China, among them – were not prepared to do so, preventing broad consensus,” they said.
“With the largest amount of excess capacity in the world, larger than the rest of the world combined, China had a unique opportunity and responsibility to engage constructively towards such a result, one that is in the world’s interest as well as China’s,” they added.
“The viability of the global steel industry has come under intense pressure from excess production and capacity in China, and there are already significant human costs associated with the current steel market downturn,” the duo said.
“This is a global issue and meaningful solutions will require global action, including from steel-producing countries, especially China. We will be working directly with China on excess capacity issues in a number of different bilateral and multilateral setting in the weeks and months ahead,” Pritzker and Froman said.
According to the US Department of Commerce and United States Trade Representative (USTR), the US steel industry is in a crisis driven in large part by global excess capacity.
This global excess capacity has more than doubled from 2000 to 2014, led by unsustainable expansion in steel making capacity by China, they said in the statement.