Since his presidential campaign, President Trump has harped on cutting the national deficit and increasing infrastructure spending to improve the country’s roadways and systems. That all relies on steel. And the steel industry as a whole has struggled mightily. After the election, the steel sector rose by 40 percent. But that didn’t last. One big culprit? China. Now, Trump is again taking a look at protecting the struggling steel industry against shady trade practices by U.S. international trade partners; specifically China. Trump announced that he’s stopping illegal steel dumping by China through tariffs and quotas. Can the plan succeed? Or will trump end up pricing out U.S. exports?
Will Trump’s Plan on Stopping Steel Dumping in China Succeed?
The Trump administration believes China, our overseas trade partner, is guilty of a practice called “dumping” . Dumping is a term that refers to exporting a product at below the typical market price to undercut other countries. Trump believes that China is guilty of this when it comes to steel, and he’s right.
This isn’t the first time China has been accused of unethical practices. In November, U.S. steelmakers accused Chinese steel companies of shipping steel through Vietnam to secure lower tariff costs.
The U.S. imports a third of the steel it uses. Chinese steel makes up 3 percent of that steel. However, if China continues to underprice domestic steel, then that number could grow, which would lower the cost of steel overall, hurting the U.S. manufacturing industry as a whole.
On Thursday, Trump announced to reporters on Air Force One that he’ll fight China’s steel dumping through tariffs and quotas. Doing so could result in a trade war. But Trump doesn’t seem concerned about that.
Watch the video from Wochit News about Chinese Steel Dumping:
If — or rather, when — Trump puts quotas and tariffs into place against Chinese steel, U.S. steelmakers such as United States Steel Corp. (X), AK Steel Holding Corp. (AKS), and Nucor Corp. (NUE) all of which are up on the news, should continue to rise.
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