The ongoing stagnation in the global economy, marked by falling investment and the emergence of overproduction in key basic industries, is fuelling the rise of trade war protectionist measures by the major powers, above all the United States.
Last week, the US International Trade Commission (ITC) launched an investigation into Chinese steel mills which have been accused by the United States Steel Corp of stealing secrets and conspiring to fix prices.
Chinese industrial overcapacity, especially in steel, will be on the agenda of the “strategic and economic” dialogue to be held between the US and China in Beijing next week. The US treasury undersecretary for international affairs, Nathan Sheets, recently called for China to allow its industries to “better reflect capacity and global demand conditions.” In other words, China should cut back production.
Overproduction in the Chinese steel industry has been blamed for an increase in cheap exports and the loss of jobs and plant closures in both Europe and the US.