May/June 2016

May/June 2016

Anybody who has read Philip K Dick will know all about parallel universes. In fact, if you read too much of this great American novelist you might find yourself 'Dicked out'. In other words, unable to distinguish between what is real and what isn't. I felt this way when I returned to my hotel room to mull over the content of AISTech 2016's Town Hall Forum where the great and the good of the American steel industry claimed, in no uncertain terms, that they – the American steel industry – were at war with China; not the entire nation, you understand, just its steel industry.

I should have known when I attended the 2015 event and ArcelorMittal USA's Andrew Harshaw brought a touch of High Noon to the proceedings when he told journalists that the only thing the Chinese understand is the rule of law. This year things have escalated and now it's all-out war. Or so said Cliffs Natural Resources' Lourenco Goncalves. He told a massed audience at the David L Lawrence Convention Centre in downtown Pittsburgh – home of AISTech 2016 – that the Chinese started it and they were being aided and abetted by the Australians who were supplying Chinese steel mills with iron ore 'to perpetrate war with the rest of the world'. No, I'm not making this up, and to the best of my knowledge, I'm not living in a parallel universe.

It wasn't just Mr Goncalves indulging in such fighting talk; the rest of this year's esteemed Town Hall panel agreed and who can blame them? According to the American Iron and Steel Institute more than 12,000 US steel jobs have been lost in the past year, with imports touching a record 29% of the US market.

Statistics like that make slapping a 522% tariff on cold-rolled flat steel from China perfectly acceptable and, of course, it's good that the Americans are protecting their home-grown steel industry. On the other side of the pond, a 'significant majority of MEPs' believe it is wrong to grant China Market Economy Status (MES). Perhaps I am living in a parallel universe, just like the characters in Philip K Dick's The Man in the High Castle.

Later, after a cold shower and an even colder beer – we British tend to enjoy warm beer much to most Americans' disgust – I wandered around Penn Avenue, eventually stumbling (not literally, I only had one beer) upon an impressive-looking comic book store. It was the sort of place where I might have found a few characters from a Philip K Dick novel. After browsing the vinyl and the comic books and considering the purchase of a whacky tee-shirt, I engaged the storekeeper in conversation. How did he feel, I wondered, about Donald Trump becoming the next leader of the free world? He didn't seem to relish the prospect.

As the convention was now over for another year I wandered back to my hotel, contemplating dinner, a good night's sleep and then a transatlantic flight to London. I began to wonder how a Donald Trump presidency might affect the US steel industry – positively or negatively? When I thought of all that excess steel floating around in China I figured he could always build another wall, in addition to the one he is planning to keep out the Mexicans. In a few months from now, of course, we will all have a clearer picture of how things will pan out politically in North America and whether the new President of the United States, be it a man or a woman, will be a good or a bad thing for the nation's indigenous steel industry.

May/June 2016 Contents

April 2016

April 2016

When the Mekon’s spaceship landed in Port Talbot, UK, and an alien emerged in a tailored suit, wearing a bush hat with corks dangling from the brim, steelworkers in high visibility clothing watched on in awe. 

“Are you real? I mean, we’re not imagining you, are we?”

“I’m real enough,” replied the alien.

“You speak English, earth person?”

“Yes, I’m Sajid Javid, the Business Secretary.”

“Get him, lads!”

Well,  perhaps they might have changed their minds on Mr Javid’s commitment to the British steel industry now that the British government has announced it will stump up a 25% stake in any rescue deal for Port Talbot – not quite nationalisation or playing the Chinese at their own game, more of a commercial arrangement, but it’s better than nothing.  

That said, Javid’s announcement does not absolve the British Government from responsibility for supporting China’s wild claim for Market Economy Status (MES) and doing little to bolster the UK’s indigenous industry as it fights for survival against a flood of cheap steel imports and all the rest of it.

It is disappointing that it has come to this: a board meeting in India deciding the future of one of the UK’s foundation industries and the community it supports. 

The Chinese problem, of course, is global and that is what prompted US Steel’s Mario Longhi to accuse the British government and the EU of negligence in their approach to steel dumping. 

Europe’s steel industry warned politicians about taking a softly softly approach towards China, but in the same way that social workers send vulnerable children back to abusive parents, or the authorities ignore known terrorists until it’s too late, politicians in the UK and Europe are still not listening. Unfortunately, they are still highly likely to grant MES to China in December, despite risking the loss of up to 3.5 million jobs.

April 2016 Contents

March 2016

March 2016

There are not many things in life that can beat a full English breakfast and a mug of builder's tea. Sausage, bacon, fried egg, a slice of black pudding, baked beans and a few mushrooms – pull up a chair!

That said, there's a growing appetite in the UK for a Full English 'Brexit' from the European Union (EU) and while I haven't made up my mind, there are some niggly aspects of the direction in which the EU is heading that worry me. At the heart of my concerns are issues surrounding 'ever greater union', open borders, the Eurozone and a loss of sovereignity – not to mention excessive regulation. 

Even the Europeans are frustrated with the EU and some of its rules. Take the Lesser Duty Rule (LDR). While the Americans are hammering the Chinese with preliminary anti-dumping duty of up to 265.79% in response to uncontrolled dumping of cold-rolled coil, the 'soft touch' EU has settled for just 13-16% for cold-rolled flat products and this has proved to be too much for EUROFER. "No other major trading partner applies the LDR as judiciously as the EU, and its use is not a WTO obligation."

There are so many questions, and most of them are simply why? Why does the EU have so many silly rules that blatantly disadvantage its own industries? Why does the EU's 'state aid rule' exist if it means that the British government is forbidden from supporting its own steel industry when it falls victim to Chinese imports?

EUROFER's Axel Eggert is understandably angry. Tariffs as low as 13%, he argues, do not sufficiently capture the injury suffered by the European steel industry.

Why is the EU incapable of defending its strategic sectors? Eggert believes that many EU governments are neglecting the impact LDR is having on jobs and industry in their own countries.

Perhaps now is not the time to discuss the Transatlantic Trade & Industry Partnership (TTIP) – which is being quietly agreed behind closed doors by unelected officials, despite massive opposition from EU citizens and without proper consultation with European governments.

Cecilia Malmström, the EU's unelected trade commissioner in charge of TTIP negotiations has commented: "I do not take my mandate from the European people." It turns out she takes her orders from corporate lobbyists.

Anybody for a full English Brexit?

 

March 2016 Contents