Leading prime ministerial candidate Shinjiro Koizumi called for U.S. cooperation against the “shared challenge” of China’s steel industry.
China is the world’s top steelmaker, and both Japan and the United States are trying to curb cheap Chinese steel imports to protect local industries.
“If China, producing cheap steel without renewable or clean energy, floods the global market, it will most adversely affect us, the democratic countries playing by fair market rules,” Koizumi said Sept. 14.
Meanwhile, the Japanese firm Nippon Steel Corporation, the world’s fourth largest steelmaker, is hoping to acquire the U.S. Steel firm.
Steel Deal
Last year, Nippon Steel announced it would purchase U.S. Steel for $14.9 billion cash. U.S. Steel shareholders approved the offer in April, and union workers oppose the deal, as do presidential candidates Vice President Kamala Harris and former President Donald Trump.
The Committee on Foreign Investment in the United States is undertaking its second, 90-day review of the deal, and could either make a recommendation this month or extend the review another 90 days.
U.S. Steel was formed in 1901 when industrial tycoons Andrew Carnegie, J.P. Morgan, Charles Schwab, and Elbert Gary joined together to merge Carnegie Steel Company and Gary’s Federal Steel Company. The historic company has built iconic structures like the San Francisco-Oakland Bay Bridge and the United Nations Building in New York City.
In the 1950s, the United States produced nearly half the world’s steel. Today, it produces around 81 million of the 1.89 billion annual metric tons produced worldwide, or about 4.3 percent, according to the World Steel Association.
“The president’s position is that it is vital for U.S. Steel to remain an American steel company that is domestically owned and operated,” White House adviser Saloni Sharma said. Both presidential candidates have touted U.S. Steel as an American manufacturing company, opposing the Nippon Steel deal.
Earlier this month, the foreign investment committee sent a letter to Nippon Steel and U.S. Steel saying that the acquisition could lead to a reduction in steel production capacity in the United States.
China Overcapacity
Both Japanese and U.S. steel industries view cheap steel exports from China as a major issue.
The U.S. government has already increased tariffs on Chinese aluminum and steel to 25 percent and in July announced a partnership with Mexico to try to close a loophole that allows Chinese state-run manufacturers to avoid tariffs by shipping to the United States through Mexico. Nippon Steel is also lobbying the Japanese government to curb imports of steel from China.
China has been the world’s leading steel producer for several years, and now its industry faces challenges both domestically and abroad.
Domestically, China’s real estate construction usually accounts for roughly a quarter of all steel consumption worldwide, according to an HSBC analyst. However, the collapse of China’s real estate industry resulted in sharp decline in demand and an increase in China’s net crude steel exports, which went up 64 percent in 2023 from 2022.
The Chinese Communist Party (CCP) has aggressively expanded China’s steel industry to achieve a dominant position in the global market, and other countries’ anti-dumping measures have heightened China’s oversupply crisis. In late August, the regime suspended a steel industry policy enacted in 2021, which had the effect of stopping any new steel plants from being built.
Reuters contributed to this report.
From The Epoch Times