Does the evidence suggest to you that China is dumping excess steel production on world markets?
China is dumping excess steel production in the world market. The reason behind this prominent dumping is the mass production of steel in recent years. It is a fact that Chinese steelmakers have maximized the production process to meet the needs of construction and mega infrastructure projects. However, the demand for steel declined, and China had to go to the foreign market to sell its steel at a low price. Of course, according to evidence, China had to sell steel, derived from mass production to get some return. The dumping was necessary to make money from steel production, even without an adequate demand in China.
Absent of any response from other nations, how long can China pursue this policy?
China has maximized the steel production and exported it to many other countries, including the United States and Europe. Selling or exporting steel at low prices despite containing high taxes or tariffs can be pursued for a limited period. It has been revealed that Chinese steel exports caused unemployment in the steel industry in the United States and many other countries. Even China is unmoved despite having high tariffs. The policy can be sustained by tax and duties are manageable. Also, China has to slow down its steel production to reduce exports and revise its pricing strategy.
Who is harmed by this action? Who might benefit?
Many countries, including the United States, are harmed by this action. Selling at an unfairly low price was harmful because it discouraged local steel producers. For Instance, the United Kingdom is one of the victims of this Chinese policy. The UK lost almost 4000 steelmaking jobs due to growing steel imports. Even countries in European countries had concern due to the decline steel industry. Third-world countries were taking benefits. These countries do not have sufficient prediction resources, and they have to get low priced steel to meet construction and infrastructure needs. Thus, there were harms and benefits for different countries, and it made the steel export controversial.
What alternative policy might China pursue? What are the costs and benefits of this alternative policy to China?
There are many alternatives for China to keep its steel production and export in the loop. For Instance, instead of exporting or selling steel products at low prices (Unfairly), it is necessary to streamline the local infrastructure and construction needs. Using steel production in the country is the best option to reduce the cost of other industries such as construction as well. On the other hand, China can consider investments or projects in other countries. These projects will need Chinese steel and related products. Thus, it seems adequate as compared to this controversial policy.
Are the EU and United States correct to impose significant antidumping duties on imports of Chinese steel? What will the benefits of such a policy be? Are there any drawbacks?
It has been revealed that the United States and European countries have imposed anti-dumping policies or duties on China. In my opinion, it seems the right approach to surviving in the steel industry. Dumping of China in the global steel market is a significant threat regarding the worldwide steel industry and employment. They had to impose duties to promote their steel industry. For Instance, if the United States purchases steel from China at low prices, then the production of local steel can be declined. It may hit the economy, as steel production contributes to the economy. By this consideration, countries have to increase their production, and it may increase the cost. It seems a prominent drawback.
Can you think of any unintended consequences that might occur as the result of the imposition of antidumping duties on Chinese steel imports by the United States and the EU?
Unintended consequences may occur due to the imposition of anti-dumping policies. For Instance, China is exporting to different countries around the globe. On the other hand, many global corporations have outsourced the manufacturing or business process in China to reduce the cost of production and increase profit margins. If these antidumping policies are sustained, China may react accordingly. China can also impose high duties or taxes on different global firms. Thus, so far as global business is concerned, stiffness can be increased. Of course, China is not intended to react, but it wants its steel production useful at any cost. Thus, the threat of these consequences is always here.
What other steps could be taken in the long run to reduce the probability that producers in China and elsewhere will dump their excess production at a loss on world markets?
Selling steel at low prices is a need for China because it contains the excessive production process. To reduce the dumping, China has to reevaluate the requirements for production in different sectors such as infrastructure. China has to maintain its production capacity or limit to meet both local and foreign demand. Dumping is also a threat to Chinese firms in the United States and the United Kingdom. Thus, the country has to keep its balance to survive in the global market. Dumping is also an attractive option for the country. However, in the global markets, states may have concerns. China has to consider these concerns when making international business decisions.
