Trump Considers Hard Line on Chinese Steel in Advance of G20 Summit

Monday, 10 Jul, 2017

US President Donald Trump meets other world leaders at Germany's G20 summit from Friday, with North Korea's first successful test of an intercontinental ballistic missile casting a long shadow over the gathering at the heavily-fortified venue.

No bilateral meeting between the two leaders have been scheduled so far.

China pledged to reduce the country's annual steel capacity by as much as 150 million tons before 2020, but the country remains the world's largest steel producer and accounts for almost half of the globe's total steel production.

The European Union is considering retaliatory tariffs against the U.S. if President Donald Trump follows through on his plan to impose restrictions on the imports of steel, according to a new report from Shawn Donnan at the Financial Times.

When asked during a news conference Wednesday whether steel would be an issue discussed during the G20 summit, German government spokesman Steffen Seibert said, "That will become apparent". Juncker said that Europe expects to increase its exports to Japan by a third after trade barriers drop away.

This would trigger of course, said Gabriel a big reaction from Europe and that will hurt the well as European countries.

G-20 officials are concerned about a trade war over steel as Trump gears up for a decision on whether to impose punitive tariffs amid ongoing complaints about dumping on global markets.

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"There is a danger that the summit will lead to polarisation between the U.S. and other countries" on climate change and other issues, warned Oxford Analytics economist Adam Slater.

US steel prices are firm so far this week, holding onto their value despite the passing of the "deadline" for the Commerce Department's Section 232 investigation results last Friday.

Supporters of using the Section 232 provision argue that reliance on steel imports leaves the US defense sector vulnerable to foreign countries.

The Group of 20 nations meeting in Hamburg, Germany, agreed to fight protectionism while tacitly recognizing Trump's concerns about excess steel capacity and what he says are unfair trade practices.

"If the Trump administration finds that steel imports are disrupting national security and import tariffs are needed, those could hit many members of the G-20", said Matthew Goodman, a senior adviser at the Washington-based Center for Strategic and International Studies.

World leaders forged a fragile compromise at a summit in Germany that did not hide the reality that Donald Trump's America is increasingly going its own way. For example, U.S. Steel went up 8% in June. When it comes to trade policy, it's easy to shout "America first", but hard to define exactly what you mean by "America".