October 27, 2017

Dear AIIS Members & Friends:

As you know, for several months the AIIS has led the effort against imposition of new national security-based trade restrictions on steel imports. These ill-advised trade restrictions would do great harm to our extended steel supply chain, and impair the livelihoods of many men and women. Our efforts have included testifying at a Department of Commerce hearing, two National Press Club events, the commissioning of a major new national economic impact study, outreach to like-minded organizations representing other sectors of the economy, such as agriculture, Congressional briefings, and other activities.

Our opposition to these types of new trade restrictions is primarily based on three points:

First, new national security-based trade restrictions would do nothing to address the fundamental, underlying problem: China’s prolific use of trade-distorting state subsidies, the principal cause of much of the global excess capacity in steel.

Second, new national security-based trade restrictions would open the “Pandora’s Box” of trade. Most of our trading partners have sensitive items they would like to protect from foreign competition. U.S. manufactured goods and agricultural products are highly competitive overseas. If we seek to block steel imports on national security grounds, it is very likely that our trading partners will seize this opportunity and invoke never-before used national security exceptions to WTO obligations to shield their domestic goods from competition from our exports. This is the “Pandora’s Box” of trade. Once this process starts, it will be impossible to contain.

Third, new national security-based trade restrictions on steel imports will certainly result in damaging retaliation against U.S. exports, including in areas far removed from steel, like agriculture.

As we continue to engage in the ongoing public discussion regarding this issue, I strongly believe that our arguments should always be principled, fact-based, and policy-focused.

With this perspective, I wrote this comment regarding the China steel overcapacity problem, which the Wall Street Journal published in yesterday’s (Thursday, October 26) edition.

I will continue to keep you apprised of any developments on this important matter.

Best,

Richard

Richard Chriss, Esq.
President & International Trade Counsel
American Institute for International Steel, Inc.
Ph: 703.245.8040
Chriss@aiis.org

Wall Street Journal: Chinese Steel Overcapacity: A World Problem

RC Comment

Oct. 25, 2017 12:26 p.m. ET

Wall Street Journal

There is no better way for America to constructively meet China’s steel challenge than by advancing a robust, sustained, multilateral effort under the Global Forum on Excess Steel Capacity.

John Ferriola is largely correct in his analysis of China’s prolific use of state subsidies to distort global steel trade, but not in his proposed remedy (“China: A Company Disguised as a Country,” Letters, Oct. 17). Rather than impose new trade restrictions under a seldom-used, Cold War-era law, an action that will certainly result in damaging retaliation by our trading partners, the better course is to heed the counsel of Harvard’s Graham Allison, who noted in “Behold the New Emperor of China” (op-ed, Oct. 17) that China’s influence on the world stage surged as America has retreated.

There is no better way for America to constructively meet China’s steel challenge, and at the same time reclaim its international economic leadership, than by organizing and advancing a robust, sustained, multilateral effort under the Global Forum on Excess Steel Capacity, an entity the U.S. helped create, to achieve a workable, long-term solution to the steel over-capacity problem. There is no better time to start than now.

Richard Chriss

President

The American Institute for International Steel

Alexandria, Va.

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