The WSJ reported that Kobe Steel has been indicted in Japan on the ongoing quality falsification scandal. No specific executives were indicted and the maximum penalty is $2.7 million. Seems like a slap on the wrist for decades of falsification, but this is probably just the tip of the iceberg of their legal issues.
Wolfgang Eder, CEO of VAI discusses overcapacity in the EU in the Financial Times.
The economist has an article discussing the section 232 action and President Trump’s options. I’ve been reading a lot of these types of articles lately and I keep asking why is it that they are written in a way suggesting that America must justify protecting it’s own interests (i.e. domestic steel production, jobs, healthy middle class, open transparent fair business competition, etc.)?
Reuters has a similar (but much more neutral) article here. From the article:
Critics charge that using national security to erect steel tariffs could trigger a trade war with China
Tariffs wouldn’t be necessary if the Chinese government would privatize it’s industry and quit subsidizing it, as in honest, fair, competition.
undermine the global rules-based trading system
The global rules-based trading system isn’t working. American steel companies have to compete with a communist state.
and hurt U.S. allies more than China
Only if we allow it to. It doesn’t have to.
and damage global growth prospects.
And maybe America protecting it’s interests will result in a cosmic planetary collision, but there’s a lot of uncertainty in that conclusion.
BBC travel had a post describing a few cities most welcoming to expats. This was published back in February but I bumped into it again somehow.
The AISI released a report showing US steel imports are up 18% YTD through November.
The Soviets built a rival to the Concorde. It was a failure, but still impressive.
The Financial Times has an article (that’s not behind their paywall) discussing AM’s purchase of Taranto Steelworks in Italy. It goes on to discuss consolidation of the industry in the EU and a potential joint venture between AM, Tata and ThyssenKrup. Interesting because Thyssen has disclosed their intention to exit steelmaking.
Senator Schumer plans to block Commerce Dept nominees until the department provides info on the progress of the ongoing section 232 investigation that was supposed to be completed in June.
ThyssenKrupp and Tata finally got together. The BBC has some details here. Thyssen’s price jumped 5% and then continued it’s previous decline (see chart). Hopefully this is good for the EU steel industry, unfortunately it will not be good for some of the workers.
Another example of the predicament we’ve let ourselves get into as a nation. Someone has to lose instead of all of us winning together. We do much better when we all win together.
The Economist has an article discussing capacity cuts of commodities in China.
China needs lots of material to build all its homes, trains and tunnels. Even so, it produces more than it can use. It accounts for roughly half of global production of steel, coal, aluminium, glass and cement. By one oft-cited gauge, China’s unused steel capacity equals the total annual output of the next four biggest producers (Japan, India, America and Russia) combined. As the excesses piled up in China over the years, they weighed on global prices, depressing profits for all. However, unlike their international rivals, Chinese firms could carry on expanding, confident of state support.
(my emphasis). And until recently US (and other public) producers have been expected to compete with this state funded, supported overcapacity and dumping. Hard to believe it has continued for so long. Health insurance companies don’t even have to compete across state lines!