China and the US remained at odds on Thursday over how to combat excess capacity in the global steel sector, trading barbs at the conclusion of a ministerial level G20 industry summit in Berlin.
Representatives of G20 member states at the ‘Global Forum on Steel Excess Capacity’ said they had at least agreed on the need for dismantling market distorting subsidies, restructuring the sector, ensuring a level playing field and increasing transparency on capacity cuts.
But China and the US remained far apart on many matters, with Beijing insisting it had done its bit to tackle the overcapacity problem while Washington said it would continue to protect its borders from what it sees as unfairly traded steel. Assistant Chinese Commerce Minister Li Chenggang warned against a situation where his country makes painful efforts to cut capacity “while the rest of the world just watches”.
China, which produces and consumes half the world’s steel and, has cut some 100 million tonnes of legal capacity and another 120m tonnes of illegal capacity since January 2016.
The US, the world’s biggest steel importer, remains intent on pressuring China, both directly and through global forums such as the G20, to cut more capacity and avoid market-distorting subsidies. Jamieson Greer, chief negotiator for the US, said the G20 forum had agreed “initial steps” but that far more needed to be done.
“Addressing excess capacity requires concrete policy steps (like) removing subsidies. State owned and private steelmakers need to be treated equally,” he said.
“The forum hasn’t made meaningful progress on the root causes of steel excess capacity. The report doesn’t have complete information on market distortions and doesn’t have ways to get that data,” he added.
US President Donald Trump has repeatedly threatened to impose punitive tariffs on steel imports into the United Sates from China and beyond, even launching a ‘section 232’ investigation in April into whether steel imports pose a risk to national security.
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