US Presses China to Reduce Steel Production

The United States of America has recently engaged in a round of intense talks with the Republic of China regarding the glut of steel production that has led to major fluctuations in the consumer and trade investment market. Various Chinese state owned companies have backed various steel production companies that have produced such a large amount of steel that it has drastically offset the sale of steel across the globe. While earlier on, many countries came to China in order to fulfill their steel demands, just recently, the story has changed. After China underwent an intense crash of their financial system, they have been stretched to the limit, and have been doing so, resulting in over-production.

The glut in the market

The over-production of steel has led to a glut in the market which then in turn resulted in the sudden plummet in steel prices all over the world. China was mindful of such a consequence early on, but they did not have much of an option as they had to produce and sell steel in order to stay afloat.  But this has come at the irreversible cost of drastically harming the environment. This has also spurred a quick and steady decline of European and American steel. Many financial experts compare this situation to virtually the exact same phenomenon that occurred a year ago with the oil and gas production sector.

The oil glut led to the sharp decline in prices. The United States of America, along with its high level diplomatic delegation will have closed door talks with their Chinese counterparts on how the problem could be solved without harming foreign interests in the Asian continent. United States Treasury Secretary, Jacob Lew stated that the over-production and glut of steel has been drastically distorting global markets, making it unconducive to investment and business.

New imposed sanctions

The United States has also imposed heavy dumping tariffs that seem to be aimed towards China because of the over production of steel. The language of the sanctions are much gentler than expected. The move led Europe to impose similar sanctions to avoid the glut and supply of steel in the international markets. The high level meeting is also meant to accomplish and help the two nations abide by their respective pledges and commitments that they had offered at the COP21 in Paris. Both nations seem to be committed towards their environment goals and policies. Secretary of State, John Kerry, will also be a part of the talks.

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