Protectionism cannot revitalize US steel
US President Donald Trump ordered an investigation on Thursday into whether steel imports from foreign countries, China included, are putting the US at risk. If so, the president has the right to implement emergency trade sanctions.
Although Trump said this “has nothing to do with China,” China is a major steel exporter to the US and has previously been the target of US protectionism. Some industry figures are concerned that the steel issue might trigger a China-US trade war. These concerns are not groundless given that US Commerce Secretary Wilbur Ross said the investigation will determine whether Chinese steel is a threat to US national security.
It’s no surprise that Trump has chosen to probe steel. During his campaign, he promised this kind of investigation to win votes from steelmaking unions and industrial regions. There are also hopes that steel could be the foundation of a revitalization of US manufacturing and infrastructure. Talking tough shows Trump is honoring this commitment. It also helps boost his popularity and allows him to set the agenda at the next round of bilateral trade talks.
Stopping foreign steel and bringing back jobs is no new problem. For over a decade, the US government has tried almost every method at its disposal but this “sunset industry” has simply refused to come back to life.
The decline of the US steel industry is a result of market forces. As with outsourcing, companies responded to high costs of labor and production in the US, coupled with a strong dollar. Therefore it is impossible that this sector be revitalized by administrative orders or protectionist policies.
Steel production is no longer a touchstone of national strength. It has become just another product on the global market. Cheaper, better steel supported and benefited the US economy.
The history of the steel industry reflects how globalization has changed the world’s landscape again and again. In the last two centuries, the global steel sector’s center of gravity has made three major shifts, from the UK to the US, from the US to Japan and South Korea, and then to China. It represents the trend of global multipolarization and a shift in economic dynamics. This landscape determines the framework of Sino-US relations and how the two countries can communicate in trade.
Of course China cares about whether the US chooses to target its steel, but any sanctions would be like a boomerang that is destined to return to its thrower. In the 21st century, no country can survive on draining other countries’ blood. Whether a country is powerful or not is determined by how many development opportunities it can provide to the world.