Trade disputes

China must reconfigure its economy as US and India are choosing local steel for infra projects and Europe is pushing against Chinese imports


Photo: Bloomberg
Photo: Bloomberg

On the campaign trail, Donald Trump had promised that American steel, not Chinese, would be used in his big infrastructure push. He is now looking to deliver with his proposal that two energy pipeline projects in the US be required to use domestic steel. India is mulling following suit with a local steel requirement for government infrastructure projects. European businesses, meanwhile, are pushing back against China’s industrial policy which aims to create national champions in 10 hi-tech manufacturing sectors. They fear it could lead to the same overcapacity problem that Chinese production has caused in the steel sector.

There are two takeaways from this. The first is that the stakes are rising for a China trying to reconfigure its economy while juggling myriad variables—its debt problem, keeping growth steady and political control. The other is that Trump means to follow through on his protectionist rhetoric—and where the US leads, others will follow.

The World Trade Organization can look forward to ruling on a slew of new disputes.

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