Here are two good questions:  How did China shift from being a net importer of steel to the world’s largest steel exporter in the span of only two years?  Just what exactly could account for an extra 150 million tons of steel production in just two short years?

    AAM released a report today that may uncover the answer.  China’s central and provincial governments have been boosting the country’s steel production with massive, hidden energy subsidies that include supports for thermal and coking coal, electricity, and natural gas.

The report was authored by Asia business expert Dr. Usha Haley of the University of New Haven.  Dr. Haley said that the “shift from a net importer to the largest exporter in a span of only two or three years is staggering.  It shows that energy subsidies have a very strong correlation with Chinese steel exports.”  As AAM’s Scott Paul noted, these kinds of subsidies are “typical of China’s brazen subsidization as well as illegal practices like currency manipulation.”

China shipped 5.4 million tons of steel to the U.S. in 2006—more than double the amount in 2005.  No doubt, these subsidies have had a strong effect on China’s production.  We hope that this report may prompt Congress and the Administration to act before more American manufacturing jobs are lost. 

Reuters and the Pittsburgh Post Gazette have already written stories on the report.

A full copy of the report is available online.

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This entry was posted on Tuesday, January 8th, 2008 at 8:43 pm and is filed under Manufacturing in the U.S., Holding China Accountable, Enforcing Trade Laws, AAM. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.