Lew Says Obama To Ask China, Others To Cut Steel Production
1 September 2016
U.S. Treasury Secretary Jack Lew on Wednesday said President Barack Obama will press foreign leaders next week to take action against excess steel capacity.
“The president will press for action on excess capacity, most notably in the steel industry,” Lew said in a speech to the Brookings Institution previewing the G-20 Leaders Summit in Hangzhou, China.
“Excess capacity distorts markets and the environment, harms our workers, and runs counter to our efforts to achieve strong, sustainable, and balanced growth. He will also press for fiscal measures both to smooth the transition and increase short term demand.”
U.S. and European leaders have been making China’s steel production a big issue as they allege the fast-growing nation is dumping the product onto world markets.
China has pledged to reduce output but the pace at which they have done so has been criticized. Other countries including India and Italy also have been accused of supporting a steel glut.
For the White House, Obama’s action coincides with a presidential race where several swing states are major producers, including Pennsylvania and Ohio. Republican presidential candidate Donald Trump has said politicians have done nothing as subsidized foreign steel has been dumped onto markets. Democratic candidate Hillary Clinton has said she’ll aggressively pursue trade cases and impose consequences when China dumps products.
An exchange-traded fund of steel producers, the VanEck Vectors Steel ETF SLX, -1.23% has outperformed the S&P 500 in the last 12 months with a 26% gain but has slumped over the past five years.
Source : marketwatch.com