Take Adam Smith’s advice on low-priced clean-tech: Buy it
Bad economic ideas don’t die. Instead they just return a decade later to haunt another generation. That seems to be the situation with China’s steel industry.
US Treasury Secretary Janet Yellen plans to cite the example of steel over-capacity on a trip to China as justification for what looks like a pending crackdown on imports of Chinese clean-tech products. “In the past, in industries like steel and aluminium, Chinese government support led to substantial overinvestment and excess capacity," she said in a speech. “Now, we see excess capacity building in ‘new’ industries like solar, EVs and lithium-ion batteries." That example harks back to a panic from 2016.
“China’s steel industry is actively and deliberately flooding the international market," United Steelworkers, a US union, said then. Its [mill output] growth was “far faster than domestic and international demand would dictate." This theory led to anti-dumping tariffs on some steel products as high as 256.44% under President Barack Obama in 2015, before President Donald Trump followed up three years later with 25% tariffs on all Chinese steel products. None of it was true.
China wasn’t seeking to make more steel than long-run demand would dictate. It wasn’t responsible for weak prices in the US and tariffs didn’t halt a job decline in US metals manufacturing. It’s bad enough that misguided steel protectionism has served only to raise costs and reduce competitiveness for the rest of the US economy.
Worse still is the way the same failed policy is now being dragged out in support of far more damaging barriers on clean-tech, slowing our ability to fight climate change. Look at steel production. Chinese mills did increase capacity in the second half of the 2000s, more
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