On October 8, 2024, Sushan Demirjian, the Assistant U.S. Trade Representative for Small Business, Market Access, and Industrial Competitiveness, delivered critical remarks at the Global Forum on Steel Excess Capacity (GFSEC) held in Washington, D.C. During her address, she highlighted the pressing challenges facing the global steel industry and the inadequacies of current international trade rules in addressing these issues.
Demirjian began her remarks by acknowledging the OECD’s concerning analysis of the current state of global steelmaking capacity. She noted that excess capacity had reached 551 million metric tons in 2023 and was projected to increase to 630 million metric tons by 2026. This overcapacity is causing significant distortions in the steel market, pressuring prices and displacing efficient production methods.
The assistant trade representative pointed to the state-directed industrial policies, particularly in the People’s Republic of China, as a primary driver of this excess capacity. She underscored that such policies not only harm American workers and businesses but also create strategic dependencies that compromise national security and undermine efforts to decarbonize the industry.
A key focus of Demirjian's speech was the inadequacy of existing international trade rules to effectively regulate the behaviors and policies that have led to the current crisis. She asserted that addressing global steel excess capacity should be a priority for all nations, as it affects not only the steel sector but also critical industrial sectors and the integrity of the multilateral trading system.
Demirjian expressed optimism regarding the GFSEC’s acknowledgment of the need for concrete actions to combat excess capacity, stating that the United States advocates for the development of new trade monitoring and enforcement tools, alongside a more aggressive use of existing mechanisms.
The U.S. Trade Representative's office welcomed the collaborative efforts made by GFSEC members over the past year, highlighting particularly the initiatives from Canada and Mexico aimed at tackling non-market excess capacity and related policies. Demirjian encouraged other countries to adopt similar measures to mitigate the negative impacts of overcapacity.
She stressed that excess capacity not only affects market dynamics but also exacerbates climate issues by prolonging emissions-intensive production. This, in turn, inhibits the steel industry's ability to invest in the technologies necessary for reducing emissions.
Demirjian also discussed the interconnection between excess capacity and supply chain vulnerabilities. The USTR is currently assessing how non-market policies and practices contribute to production concentration and create chokepoints in supply chains. She indicated that the USTR plans to release new policy ideas addressing these issues in the coming months, emphasizing the importance of consulting a diverse range of stakeholders in this process.
The assistant trade representative reiterated the Biden-Harris Administration's commitment to working alongside like-minded partners to restore market-oriented conditions in the steel industry. She acknowledged that addressing emissions intensity in steel production is essential for achieving broader environmental goals.
