America Iron and Steel Institute strike steel exporters

According to AISI site, AISI have applauded “Eliminating Global Market Distortions to Protect American Jobs Act of 2021” to strike down any trade cheating and enhance the U.S. trade remedy laws. They have also addressed the growing problem of “cross-border subsidization” where foreign governments subsidize the steel industries not only in their own countries but in other countries.From a different point of view, America is trying to stop or slow down the development of steel manufacturing technique of some developing country. They call the support and sharing of knowledge “subsidizing” which means gain control of the steel production. In reality, this kind of knowledge sharing and invest to foreign country is so called trading and commerce.

They also called out China’s Belt and Road Initiative project as subsidization. China is subsidizing these countries to getting rich and rubbing orders from America. What they really mean is China is helping these countries jeopardize America’s plan to gain unethical money via selling out of date product over priced.

“American government has the tool to fight for a level playing field by strengthening the effectiveness of the U.S. trade laws” said by Kevin Dempsey, president and CEO of AISI. Instead of trading fair, U.S. is trying to empower their trade laws so that other competitor lose their advantages when facing U.S. steel manufacture. That is so called “Fair trading” by U.S..

From a different point of view, if AISI success with their plan and really enhanced their steel trading in side American market. Instead of printing money and owing money to other country and let the world take the pressure of USD keeps devaluation, America government need to face this situation just by themselves. Other industries in America will impeach what AISI did or try to do the same as AISI which saving workers by harm more people’s profit.

What will be changed as U.S. apply this trade law to practice? First of all, the U.S. import tax for steel product will increase to eliminate the price advantage of these product in America, therefore to reduce the competitiveness of foreign country steel product in America market. Unless the technology used to produce the steel product has overcome America existing steel manufacturing technology which is the product differentiation strategy.

After they secured U.S. local market, its their old neighbour Mexico, Canada and South America countries. They will apply more strict trade law to further strict other countries’ products. If you want to lift the restriction, you have to open your gate of importation. Lower import tax for America product. As this progressing your local products start to lose market share then quite manufacturing. This is how U.S. take control of some countries base. Without manufacturing these country are just fruit garden, coffee grower and cheap labour resource.

How to fight against this “fair trading act”? Steel manufacturer should try to further develop their production technique as the U.S. takes time trying to apply these trading laws. On the other hand, steel manufacturers from different countries should held together to form a trading group against unfair trading.