Policy Issues: Trade & Currency
Unfair trading practices by global steel producers puts North American manufacturers at a disadvantage. A topic so important that Richard A. Robinson, president of Norfolk Iron and Metal and chairman of MSCI, gave testimony to the United States Trade Representative (USTR) on behalf of the association on the global steel situation. In post-hearing comments MSCI recommended that U.S. trade policy be guided by three objectives to help level the playing field for U.S. metal manufacturers:
First, negotiate with our trading partners to address excess capacity resulting from foreign government-sponsored market distorting policies. Failure to negotiate reductions by a certain percentage over a specified period should trigger offsetting trade sanctions under the government’s safeguard authority, such as countervailing tariffs and/or import licenses.
Second, if the United States imposes additional tariffs on imported steel, there should be a corresponding and offsetting tariff on imported steel- containing products to avoid unintended damage to the U.S. manufacturers that utilize steel in their finished products.
Third, declare that the Chinese government is a currency manipulator. China’s substantially undervalued currency makes all Chinese exports to the U.S. cheaper and hurts U.S. producers, manufacturers, service centers, and the broader economy. Currency manipulation is one of the major reasons for the growing merchandise trade deficit with China, which last year exceeded $366 billion.