Britain and the EU sacrifices steel industry to curry favour with China

Britain and the EU sacrifices steel industry to curry favour with China, by Ambrose Pritchard-Evans.

Britain’s special relationship with China is becoming more expensive by the day. It now threatens to destroy the British steel industry, a foundation pillar of our manufacturing economy.

Britain is not alone. Most of Europe’s steel foundries are heading for annihilation under the current EU trade regime, with unthinkable consequences through the network of European and British supply chains. ..

[T]he British government has for the last three years been blocking efforts by the EU to equip itself with the sort of anti-dumping weaponry used by Washington to confront China.

The EU trade directorate has been rendered toothless by a British veto. So much for the canard that the UK has no influence in Brussels. …

The Chinese state-directed industry, with access to huge amounts of capital at near-zero interest rates, has built up a huge steel producing capability — too much even for the entire world. That would never have happened in a market driven economy with meaningful interest rates.

China’s share of global steel output has risen from 10pc to 50pc over the last decade. It has installed capacity of 1.2bn tonnes a year that it can never hope to absorb as the construction boom deflates.

On OECD estimates it has built up 400m tonnes of excess capacity, twice the EU’s entire steel production. China’s unwanted steel is finding its way systematically into Europe, greased by export subsidies, tax breaks, cheap state credit, and the panoply of measures used by a mercantilist power to rig global trade.

hat-tip Stephen Neil