U.S. House, Senate Lawmakers Propose Tax Credits For Steel Producers While Nations Meet In Belgium To Discuss Overcapacity
Last week, a bipartisan group of lawmakers led by Sen. Shelley Moore Capito (R-WV) and Reps. Mike Kelly (R-PA) and Mike Doyle (D-PA) introduced legislation that would grant tax credits to steel producers for the production of steel industry fuel.
Sen. Capito said, “This legislation aims to make the domestic steel industry more competitive so that jobs and businesses can grow, workers can benefit, and our military can access critical steel resources.”
Meanwhile, in Belgium last week, government officials and members of the private sector from the United States, China, the European Union and other nations met to discuss solutions to global excess steel capacity. According to Politico’s “Morning Trade,” attendees at the meeting, which was hosted by the Organization for Economic Cooperation and Development (OECD), discussed “how governments can aid market-driven industry restructuring, and participants aim to agree on steps to reduce competition-distorting policies.”
The countries that participated in the meeting failed to reach a binding agreement, but did issue a joint statement after the meeting. In that statement, the governments of United States, Canada, the European Union, Japan, Mexico, the Republic of Korea, Switzerland, Turkey “urged the OECD, in close co-operation with its Partners and other important steel-producing economies …to develop a global forum where all can participate on an equal footing, for conducting further work on global restructuring issues in steel.”
The group said those efforts should include:
- Developing an information-sharing mechanism for monitoring crude steel capacity developments and the formulation and implementation of policy and support measures taken by governments aimed at reducing excess capacity and otherwise facilitating industrial restructuring in the steel sector.
- Developing guidelines on government policies and support measures to facilitate industry restructuring in ways that minimize market distortions.
- Monitoring the nature and extent of export credit agency support for new steel sector projects.
- Developing longer-term supply and demand forecasts for steel, taking demographic trends and innovation in steel-consuming sectors into account.
- Exploring ways to more effectively provide technical assistance on restructuring.
- Strengthening ties with other international organizations and institutions, including international financial institutions, working on issues that are relevant to the work on excess capacity and restructuring.
The Chinese government reacted to the OECD talks by insisting that it is not responsible for oversupply.
In a statement issued last Tuesday, the Chinese Ministry of Commerce issued a statement that said, “Chinese steel production capacity mainly satisfies domestic demand. China not only provides no subsidy to stimulate steel export, but also imposes export tariff on certain kinds of steel products. China also imports a large amount of steel products, offering a huge market for global steel products. In the future, China will continue to have sustained and healthy economic development and there is still much potential for steel demand.”