Trump made an announcement of possibly raising the import trade barriers for China and other Steel producing countries during a White House Ceremony with the Steel makes of the US. An investigation is initiated by the President of the US to understand the impact of the import of steel from other countries on the economy as well the military. Trump also mentioned that steel is one of the most important components for the development of the economy as well as the military forces and the US cannot afford to be reliable on any other country for it.
Allegations are against china of being dumping the excess production of steel in the US as well as other countries at a cheaper rate. China is one of the major producers of steel and has more than 4.7 million workers which is equivalent to 0.6 percent of the total workforce of china working in the steel industry. No doubt, Steel industry has contributed immensely to the infrastructural development of the country but in the current scenario is equally responsible for the economic slowdown. Donald Trump received maximum votes from Michigan and Pennsylvania which were industrial hubs in the past.
Trump is currently focusing on increasing the number of production houses within the country in order to increase the number of blue colored job opportunities. Donald Trump took help from the Trade Expansion Act of 1962 under section 232 through which he gave a hint to increase the barriers for China to dump their products further in the US. Trump also mentioned that protecting the home industry from the foreign imports through the help of WTO is not producing major impact and should be dealt with more seriousness.
The allegation is that China not only produces excess Steel in their country but also sell it at a price which is less than their production cost. If we have a close look at China, Closing of any steel company is not an easy task. On the contrary, it is an expensive task because closing a mill leads to a reduction in the number of job opportunities and cost a lot to the Government. For example, when the Hangzhou steel mill was shut down due to pollution, Government had to pay $34 million grant to the owner and the fellow workers of the company.
China has assured of reducing the production of steel over the course of years and have kept its promise to some extent. But even after reducing the production, it still remains very high compared to the amount required within the country and produced by other countries.