Shocks of all shocks, the USTR is filing a complaint, along with the EU, against China for trying to hang onto the raw materials which make steel in order to boost their own production.
We are going to the WTO today to enforce our rights, so we can provide American manufacturers with a fair competitive environment and put more American workers back on the job," Ambassador Kirk said. "China is a leading global producer and exporter of the raw materials in question, and access to these materials is critical for U.S. industrial manufacturers. The United States is very concerned that China appears to be restricting the exports of these materials for the benefit of their domestic industries, despite strong WTO rules designed to discipline export restraints.
"U.S. industries and workers can compete against anyone in the world if there is a level playing field, but China's policies on these raw materials appear to tilt that field in favor of Chinese producers," Kirk added. "We are deeply troubled at what appears to be a conscious policy to create unfair advantages for Chinese industries that use these raw materials. Now, more than ever, we must fight against this kind of domestic favoritism."
The U.S. has launched a World Trade Organization complaint against China on the grounds that Beijing unfairly helps domestic makers of steel, aluminum and chemicals, among others, by effectively blocking overseas exports of raw materials (eg. the ingredients that go into steel, aluminum and chemicals).
In essence, the complaint alleges that Chinese steel, aluminum and chemical companies get first dibs on raw materials - at ultra-low prices - from domestic producers, and are therefore more potent when competing against overseas companies. For their part, non-Chinese steel/aluminum/chemical makers have to buy raw materials in the open market, and arguably at higher prices because a lack of Chinese output limits the available supply.
Here’s what USTR boss Ron Kirk said today at a Washington, D.C., press conference: “And we are most troubled that this appears to be a conscious policy to create unfair preferences for Chinese industries by making raw materials cheaper for China’s companies to get, and goods more economical for them to produce.” The EU has filed a similar complaint.
China of course said they haven't done a thing.
WSJ notes that by the time, (if any action is taken), the WTO actually rules, it will be a couple of years from now. Just enough time to cause a lot of U.S. industries to go bankrupt.
Can't we produce these raw materials by the way?