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The Modi government seems determined to boost the country’s crude steel production capacity to 300 MT by 2030-31 in a bid to make India a global steel manufacturing hub.
At present, China is the world’s largest steel producer with a production capacity of 928.3 MT of crude steel (2018), while India, with 106.5 MT of crude steel production, ranks second on the list. Dedicated participation of all stakeholders is a must to achieve the projected capacity target of 300 MT by 2030-31.
To deliberate on major issues plaguing the sector, the Ministry of Steel is organising in Delhi on Monday a day-long conclave, during which Steel Minister Dharmendra Pradhan will seek suggestions from the stakeholders to address its challenges, identify opportunities and arrive at tangible interventions that can aid the growth of the Indian steel industry.
The National Steel Policy 2017 envisages ‘creating a self-sufficient steel industry that is technologically advanced, globally competitive and promotes inclusive growth’.
Being the third largest steel consumer in the world after China and USA, India’s per capita steel consumption at 74 kgs is one-third the global average of 225 kgs.
Various countries have focused on rapidly increasing their steel consumption in the high growth phase of their economy. At present, India’s majority steel demand comes from construction, infrastructure, automobiles and capital goods, among others.
Steel intensive construction offers an increased pace of durable and environmentally sustainable construction. Its recyclable nature also contributes to the circular economy.
The government has set a target to make India a $5 trillion economy by 2024-25, therefore promoting domestic steel industry is essential, given its high GDP multiplier and critical role in the construction and infrastructure sectors, said the Ministry. (IANS)
Their iconic blue-colored planters and grain cars are recognizable on many farms across the United States. They are also easily spotted in large displays, some stacked one on top of the other, in front of Kinze’s manufacturing hub along Interstate 80, where, inside buildings sprawling across a campus situated among Iowa’s corn and soybeans fields, the company’s employees work with one key component.
“Steel is the lifeblood of Kinze,” says Richard Dix, a company senior director. “We’re a factory that’s essentially a weld house. We cut, burn, form, shape, cut, paint steel.”
Steel now costs more, the result of a 25 percent tariff on the material imported from most countries, including China.
“When there is a tariff on steel it cuts rights to the core of our fundamental product construction,” says Dix.
In March of 2018, President Donald Trump imposed tariffs on aluminum and steel, with the goal of boosting U.S. production and related employment.
While there has been a modest benefit to the domestic steel industry, Dix says increased costs are negatively impacting smaller manufacturing companies like Kinze.
“We see the bills that come in from our suppliers are higher based on those tariffs,” Dix explains. “Not just in steel but also in a lot of the electronics, rubber commodities and other agricultural parts we buy from China as well. Those tariffs take their effect on our cost structure, on the profitability for the family, through our employees, and now to our dealers and on to our customers.”
Those customers are mostly U.S. farmers who use some of Kinze’s products to put soybean and corn seeds into the ground. Soybean exports in particular are now subject to retaliatory tariffs imposed by the Chinese, one of the biggest export markets for U.S. farmers, which has sunk commodity prices and contributed to another year of overall declining income for U.S. farmers.
That means many are less likely to purchase the products Kinze makes.
“The market is substantially down,” says Dix. “The farmers don’t have that level of security they need to go out into the dealerships and buy that equipment. We get a one-two punch. We pay more for the product that comes into us and therefore on to the customer, and then we have a reciprocal situation where we can’t export what was advantageous to us.”
These are some of the concerns Dix explained to Iowa Republican Senator Joni Ernst, who participated in a roundtable discussion at Kinze along with farmers and others in Iowa impacted by tariffs. It was part of a “Tariffs Hurt the Heartland” event hosted by Kinze, and organized by the group Americans for Free Trade along with the Association of Equipment Manufacturers.
Ernst says the personal stories she gathers from these meetings go a long way in helping President Donald Trump understand the impact on her constituents.
“He has a very different negotiating style,” she told VOA. “He wants to start with the worst possible scenario, and negotiate his way to a good and fair trade deal, but again sharing those stories is very important and yes it does have an impact. I think the president does listen.”
Ernst says she is encouraged by news from the Trump administration on developments in negotiations that lead her to believe the trade dispute with China, and the related tariffs, could end soon.
“When I last spoke to [U.S. Trade Representative] Robert Lighthizer, he had indicated that the deal with China is largely done, it’s just figuring out the enforcement mechanism, and that is what the United States and China are really bartering over right now.”
But Kinze’s Richard Dix says one year under tariffs has already taken a toll on the company’s operations.
“We’re not really that big, so we can say that this impact has been a seven-figure impact for us in the last year, and that’s a substantial amount of money.”
It’s an amount that Dix says, so far, hasn’t been passed on to Kinze’s customers, or the employees.
“We have not actually had any direct layoffs that are attributable to this tariff situation, but we’re all tightening our belts.” (VOA)
- Trump adamant about his tariff plans
- His decision is facing great criticism
- It can lead to heavy losses
U.S. President Donald Trump said Monday the United States is not backing down on its decision to impose 25 percent tariffs on steel imports and 10 percent tariffs on imported aluminum products, despite growing pressure from political and diplomatic allies and U.S. companies to pull back from a policy that could spark a trade war.
Before a White House meeting with Israeli Prime Minister Benjamin Netanyahu, Trump suggested Mexico and Canada could be exempted from the planned tariffs if a new and “fair” North American Free Trade Agreement (NAFTA) is reached.
“For many years, NAFTA has been a disaster,” Trump said. “We are renegotiating NAFTA as I said I would, and if we don’t make a deal I will terminate NAFTA. But if I do make a deal which is fair to the workers and to the American people, that would be, I would imagine, one of the points that we’ll negotiate. It will be tariffs on steel for Canada and for Mexico.”
The three countries are currently working to revise NAFTA, with the latest round of talks wrapping up in Mexico City.
Economist Gary Hufbauer of the Washington-based Peterson Institute for International Economics told VOA that people in Canada and Mexico see the Trump approach as bullying, and that their officials are less likely to make concessions that look like giving in to a bully. He also said those asking Trump to back off the tariff plan are right to fear a trade war.
“Whether we get to a trade war will depend very much on the reacting of other countries,” Hufbauer said. “The tariffs alone aren’t a trade war, but if other countries react by putting fairly strong restrictions on U.S. exports you can say we’re edging into a trade battle and it may escalate to a trade war.”
Trump’s decision to impose steep tariffs on steel and aluminum imports has drawn strong condemnation from some in his own Republican party and from U.S. trading partners around the world. Analysts warned the tariffs will hurt many U.S. allies.
Ryan is ‘extremely worried’
In a rare break with the White House, House Speaker Paul Ryan and other key Republican lawmakers are trying to convince Trump to change his mind and not impose the tariffs. Ryan and the others say the tariffs would hurt consumers because they could lead businesses to impose higher prices and undercut any positive effect the recent Republican-approved tax cuts would have on the U.S. economy.
The motorcycle maker Harley-Davidson Inc. is headquartered in Ryan’s home state and is being targeted by Europe in retaliation for Trump’s plan to impose steel and aluminum tariffs.
Ryan spokeswoman AshLee Strong said in a statement, “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan. The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”
White House Press Secretary Sarah Sanders said the administration has a “great relationship” with speaker Ryan, but “that doesn’t mean we have to agree on everything.” Sanders added, “the President has been committed and talked about this for many years, particularly on the campaign trail, and the people came out loud and clear and supported this president, therefore supporting the policies he campaigned on.”
Sanders said the administration is still finalizing the details of the measure, and she did not want to provide more information on the decision ahead of the final announcement.
President Trump tweeted last Friday that “trade wars are good, and easy to win.” When asked to elaborate, Sanders said “the President feels if we ended up in a trade war, the President is confident we will win, but that’s not the goal, the goal is to get “free, fair, and reciprocal trade, and hope other countries will join him.”
Trump told reporters he does not believe his plan to impose the aluminum and steel tariffs will spark a trade war.
Canadian Prime Minister Justin Trudeau said the tariffs are “absolutely unacceptable.”
In 2016, the last year with complete government statistics, the United States reported it sent $12.5 billion more in goods and services to Canada than it imported, while it had a $55.6 billion trade deficit with Mexico.
Canada is the largest U.S. trading partner and last year shipped $7.2 billion worth of aluminum and $4.3 billion of steel to the United States.
European Commission President Jean-Claude Juncker’s threatened the European Union could respond by taxing iconic American-made products, such as bourbon whiskey, blue jeans and Harley-Davidson.
To this, Trump responded, “People have to understand, our country, on trade, has been ripped off by virtually every country in the world, whether it’s friend or enemy, everybody. China, Russia, and people we think are wonderful, the European Union, we can’t do business in there, they don’t allow.”
$800 billion lost a year
Trump contended the EU has “trade barriers far worse than tariffs.” He said, “If they want to do something, we’ll just tax their cars that they send in here like water.”
Trump added, the U.S. lost $800 billion a year on trade, and the biggest problem is China. He said, “we lost $500 billion. How previous presidents allow that to happen is disgraceful, but we’re going to take care of it.”
In 2017, Canada, Brazil, South Korea and Mexico accounted for nearly half of all U.S. steel imports. That year, Chinese steel accounted for less than 2 percent of overall U.S. imports. VOA
Kolkata: Union Finance Minister Arun Jaitley on Sunday said the steel, power and the sugar sector along with the discoms remain stressed sectors and the government is addressing the challenges involved. “There are serious challenges in steel, power, discoms and sugar these are the key areas where we are addressing the challenges of the industry,” he said during an interactive session of the Indian Chamber of Commerce here.
With Chinese imports flooding the Indian steel industry, nearly all steel-makers in the country have posted a negative balance sheet for the quarter ended June 30 while power availability and its connectivity to rural areas remain a concern. However, the minister stressed on boosting the manufacturing sector to help India attain a 8-10 percent growth. “If we are able to increase our pace of manufacturing, our services are going to be reasonably high,” he said.
Thanking the rain-gods for being “kinder this year”, Jaitley said the agro-based industry will register “significant improvement” as compared to the last year. Further, the minister said changes in the Chinese economy will help India further its manufacturing capabilities. “There is a transformation of their (Chinese) economy taking place. Besides manufacturing, they are also getting into services and are also becoming consumption-oriented rather than export-oriented,” he said. Jaitley also said wages in China are increasing which might present a scope for India to enhance its manufacturing competitiveness.