Opinion: Trumps Not The Bad Guy And China Is Not The Only Villain

You have to hand it to US President Donald Trump. He said he would help the USA’s ailing indigenous steel industry and towards the end of last month he did just that, by announcing plans to slap 25% tariffs on imported steel. We all know that the USA’s main gripe in this respect has been with China, the global steel industry’s ‘big bad wolf’, but let’s face facts and say that while the global steel industry has protested about cheap Chinese steel, only the Americans have been proactive with both anti-dumping tariffs and countervailing duties. And now they’ve upped the ante with Section 232, claiming, some would argue spuriously, that steel imports from China and elsewhere, Canada and the EU are the biggest exporters to the USA, are likely to compromise US national security.

Some disagree and blame ‘more complex issues’ for the US steel industry’s demise, but Philip K Bell, president of the Steel Manufacturers Association, an organisation representing electric steelmakers, who account for 67% of total US steel production, told me in a recent interview that it isn’t just a military procurement exercise. “It is also to do with your energy grid, with critical infrastructure such as sea ports, airports and military bases. It’s to do with water distribution systems, highways and bridges’. In this sense, argues Bell, there’s no doubt that untethered steel imports, from China and elsewhere, pose a threat to US national security.

Industry observers are rightly concerned about a potential trade war if Trump imposes tariffs on steel imports, although some say it’s all hot air, like the infamous wall between the USA and Mexico. But he’s lit the blue touch paper and he’s readying himself for the fireworks.

What the wider industry needs to understand, according to Philip K Bell, is that when the USA is fighting on these issues, it is trying to ensure ‘that companies and countries obey our laws and that they follow rules-based trade’.

At the end of the movie Falling Down, Michael Douglas asks “I’m the bad guy?” before he is shot by Robert Duval.

As criticism mounts over Trump’s action there is a real risk that he will be branded the ‘bad guy’, when the real villains of the piece, it is argued, are those countries, China included, who are not playing by the rules and dumping unfairly traded steel on the president’s doorstep.

But how much of a villain is China? According to one online report, very little of China’s steel output reaches the USA. In May of 2017, according to US Commerce Department figures, China supplied 73.5Mt of steel, representing 2.4% of the 3.12Mt imported that month by the USA. During May last year, China, claims a recent report by Reuters, was the 10th largest supplier of US steel product imports, and over the first four months of 2017 the USA imported 236kt of steel or 2.1% of total imports. In other words, if there is a problem with too much imported steel in the USA, then China is nowhere near the main culprit.

Source: This opinion was written by the Steel Times International