Updated Study Details Unfair Trade Advantages for China’s Stainless Industry
08/24/2007 - A report released by the Specialty Steel Industry of North America alleges that the government of China has spent the past decade breaking international trade rules with its policy of conferring preferred status on the stainless steel industry, and providing it with a wide range of preferential treatment programs and direct subsidies.
International trading rules recognize that foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture or exportation of goods. This foreign government subsidization ignores free-market principles and runs counter to international trade rules, including the U.S. trade laws.
A report released by the Specialty Steel Industry of North America (SSINA) alleges that the government of China has spent the past decade breaking these rules with its policy of conferring preferred status on the stainless steel industry, and providing it with a wide range of preferential treatment programs and direct subsidies.
Updated since its last issue in April 2007, the report—“Chinese Government Subsidies to the Stainless Steel Industry”—shows that China’s policies to ensure viability of its own stainless steel industry (at the expense of other countries, such as the U.S.) attained fruition in 2006 as China became the world’s largest producer of stainless steel. The report notes that China, despite its achievement of world-leading production volumes in just ten years, plans to continue to expand stainless steel production capacity at a very rapid and incongruent rate.
"Today, the U.S. stainless steel industry remains healthy and competitive, even in the face of such egregious unfair Chinese government practices as massive cash infusions and forgiveness of debt for its stainless steel industry," said SSINA Chairman Doug Kittenbrink. "But many U.S. manufacturers that would otherwise be competitive but for subsidized competition from China are being forced out of business. SSINA members recognize the importance of being able to address Chinese subsidies in the future should the need arise." Kittenbrink also stated that, "the industry will continue to do our research and show how China is playing by its own rules, and not those of the international community, to the detriment of all trading partners."
The comprehensive report, which was compiled by the Washington, D.C. law firm Kelly Drye Collier Shannon, lists specific examples of how the government of China subsidizes its stainless steel industry through debt forgiveness, preferential debt financing, government support of technological renovation projects, and preferential tax programs, among others.
The entire report, “Chinese Government Subsidies to the Stainless Steel Industry—An Update”, can be found on the organization’s website: http://www.ssina.com.
SSINA is a Washington, D.C.-based trade association representing virtually all continental specialty metals producers. SSINA Chairman Douglas A. Kittenbrink is Executive Vice President, Corporate Planning and International Business Development, Allegheny Technologies Incorporated, Pittsburgh, PA.
SSINA Member companies are:
· AK Steel Corp., Middletown, Ohio
· ATI Allegheny Ludlum Corp., Pittsburgh, Pa., and ATI Allvac, Monroe, N.C. (both Allegheny Technologies companies)
· Carpenter Technology Corp., Reading, Pa.
· Crucible Specialty Metals, Syracuse, N.Y.
· Electralloy, Oil City, Pa.
· Haynes International Inc., Kokomo, Ind.
· ThyssenKrupp Mexinox SA de CV, San Luis Potosi, SLP, Mexico
· North American Stainless, Ghent, Ky.
· Outokumpu Stainless, Inc., Schaumburg, Ill.
· Precision Rolled Products, Inc., Florham Park, N.J.
· Latrobe Specialty Steel Co., Latrobe, Pa.
· Universal Stainless and Alloy Products, Bridgeville, Pa.
· Valbruna Slater Stainless Inc., Fort Wayne, Ind.