Posted on 05/22/2016 10:59:49 PM PDT by Trumpinator
Despite China signaling moves to cut its excess steel production capacity, industry chiefs say the country has declared a metals "war" that has had a "devastating" impact for the rest of the world's industry.
(Excerpt) Read more at cnbc.com ...
Why is China dumping cheap steel on the world?
It is not out of the goodness of their heart.
China is going for world economic dominance. And Free Traitors™ give us economic “theory” as justification.
The only way to beat them is bigger, better and new production efficiency. That also means huge infrastructure costs which means a longer return profit. A smart company can do it but most investors won’t think past the next quarter.
What you say (buy the cheap steel, let the chips fall where they may) would be fine IF opening and closing our plants, including retraining workers and tooling up equipment were not costly in terms of money and time, and if a certain amount of steelmaking capacity was not also a strategic necessity.
If China were to dedicate itself to supplying all of the world’s steel at a loss, say for domestic employment reasons, and no one were worried about not being able to make their own in a possible time of war, or downstream monopolistic behavior, it would make sense to let them do it. But, there are other considerations.
This is, simply, not true.
Think nothing is made in America? Output has doubled in three decades
It’s an old trick, lower your prices until your competitors go out of business, then you can charge whatever you want. It’s called monopoly capitalism. Once our industry is gone it won’t come back cheaply or quickly. Maybe never. That’s why the Saudis are glutting the market with oil. If they can keep the price down our domestic production companies will go out of business, and it would take a decade or more to bring it back. Our founders understood it, and that’s why they were advocates of tariffs.
The Chinese have been trying to corner the world steel market for the past 15 years. Check out the statistics in this document:
World steel production has practically doubled since 2002, with most of that increase being Chinese. The Chinese now produce in excess of 800 million tons of steel annually, and had a stated goal of ONE BILLION tons annually. They now produce almost half of the world’s steel. Japan is the second largest steel producer, but only manufactures about 110 million tons. The United States is still one of the world’s largest steel producers at 80 million tons, but we only produce one-tenth of what China produces.
China is basically trying to put all other steel producers out of business and establish a world monopoly on steel production. To say they have an excess capacity is an understatement. But it’s not an excess capacity if no one else produces steel. One of my college roommates works in the steel industry in northwest Indiana. Two years ago he told me their industry outlook was poor as they just couldn’t compete with the Chinese.
Oh, and here is another thing to consider. It takes about a ton of coal and a ton of ore to produce steel. China added about 700 million tons of steel production in the past 15 years; what does that translate into for the world consumption of coal? That tells me that the Chinese have absolutely no intention of abiding by any sort of environmental treaty with which they intend to shackle the rest of the industrial world.
Now why aren’t the American environmental groups screaming their heads off about the Chinese coal consumption? Because the Chinese aren’t paying them to hamstring Chinese industry, only American industry.
I suggest reading “Freedoms Forge”
It tells the story of the US industrialization to fight WW2.
Very eye opening and our present state is very similar to 1940.
Guess which Party was in charge then...
For national security reasons we need to own manufacturing, commodities, energy and technology sufficient to produce as much war material as possible.
And, we need an economy healthy enough to afford it.
Steel is a vital commodity, we as a nation must insure we can produce steel domestically. Tanks, ships, guns and all kinds of other stuff is made from steel. Allowing China to put our domestic steel producers out of business is insanity.
Short sighted stupidity. This is what afflicts the Wall Street idiocy. The aim of such tactics is to destroy the competition - then once that is done the prices go up. Once an infrastructure is gone it is almost impossible to re-create it.
In the meantime the American economy is hurt by loss of jobs, etc. So the savings gained from buying steel by a manufacturer are not worth it in the long view.
I see the American steel Nazis are at it again....
Output of what is left is shrinking.
Output of what is left of a shrinking manufacturing base is increasing. But that does not mean manufacturing is making a comeback.
I know we like to highlight all the jobs going over seas, but it was only like 2 years ago that China FINALLY surpassed the US in manufacturing.
The US just tends to specialize in higher end manfuacturing. The low to no skill required stuff that a rice farmer can do is what gets exported.
That’s a lie free traitors like to push.
We all know Boeing is low tech right? Free traitor.
Boeing doubles outsourcing from India to $500 million in a year
Read more at:
http://economictimes.indiatimes.com/articleshow/51009175.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
It's economic good sense, which we would do well to follow before we start erecting tariff walls to protect the EPA, the UAW, OSHA, the EEOC, and Obamacare.
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