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In a letter delivered to Secretary of State Hillary Rodham Clinton and Secretary of the Treasury Timothy F. Geithner, Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), urged the Administration to press China to reform trade-distorting industrial policies and undervalued currency as the United States prepares for the May 24-25 Strategic and Economic Dialogue (S&ED) with the government of China.
The letter urges the United States to, first and foremost, keep the pressure on China to address its currency manipulation.
“A mere repeat of the minor changes in Chinese currency practices that occurred in July of 2005 is not an acceptable outcome,” Gibson stated. "Significant and lasting reform in China currency policy is necessary to redress global structural imbalances, create U.S. jobs growth, preserve and strengthen the U.S. manufacturing base and achieve the President’s goal of a doubling of U.S. exports by 2015.”
Gibson said AISI strongly supports President Obama’s National Export Initiative, but warned that his goal will not be met unless the Administration applies greater pressure on the government of China “to eliminate market-distorting industrial policies, such as massive government subsides…as well as measures to limit imports, restrict foreign investment, manipulate VAT rebates and restrict exports of vital raw materials.”
In a few weeks China will unveil a new Five-Year Plan of central government direction and control of the Chinese Iron and Steel Sector. If unchallenged, government-supported steel capacity additions are continuing in China, with expectations that China’s total steelmaking capacity will expand to roughly seven times that of the United States by 2012, Gibson’s letter stated.
“Unless countered, the result will be more Chinese disruption of world markets, not just in steel, but also in steel-consuming industries, which constitute the bulk of our domestic manufacturing base.”
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