China’s Steel Surge: A Threat to Fair Competition
In recent years, China has dramatically expanded its global steel exports. Between 2020 and 2024, Chinese steel exports jumped from 69 million metric tons to 118 million metric tons, an explosive increase of 71%. This growth is not organic or market-driven but rather fueled by extensive government intervention. These include direct subsidies, tax breaks, and preferential access to energy, raw materials, and financial resources.
This artificial competitive edge allows Chinese companies to flood global markets with steel at prices that are often below actual production costs, a practice known as dumping. Such strategies distort global prices and put immense pressure on manufacturers in countries that operate within the framework of fair competition and market economies.
Environmental & Ethical Concerns in Chinese Steel Production
Aside from economic distortion, China's steel production also raises major concerns about sustainability and environmental responsibility. Many of its mills operate under less stringent environmental regulations, contributing significantly to pollution and global emissions. This gives Chinese producers another unfair advantage, as they are not held to the same environmental standards imposed on producers in Latin America, the U.S., and Europe.
By combining cost advantages from subsidies with lax environmental oversight, Chinese steel poses a dual threat, economic and ecological, to the global industry.
Regional Response: The Case for Metalmechanic Integration
Faced with these growing challenges, Ezequiel Tavernelli, Executive Director of Alacero, presents a strategic vision: a regional integration of the metalmechanic value chain. This would involve aligning the production, technology, infrastructure, and industrial capacities of Latin American nations and the U.S. into one cohesive system.
The metalmechanic sector is crucial, it links steel and metals with manufacturing, machinery, and industrial processes. Strengthening this sector through regional cooperation would help absorb shocks from global overproduction and allow countries in the Americas to regain control over their own industrial destinies.
Beyond Trade: Building Industrial Sovereignty
Tavernelli’s vision goes beyond protecting trade balances, it’s about revitalizing regional industry and preserving sovereignty. With an integrated value chain, countries in the Americas could become less dependent on global supply chains, which have proven vulnerable in recent crises like the COVID-19 pandemic and geopolitical conflicts.
This regional approach would not only shield local producers from predatory pricing but also stimulate investment, research, and job creation in strategic sectors. Policies could be coordinated across borders to ensure fair labor practices, sustainable production, and consistent technical standards.
A Strategic Alternative to Deindustrialization
One of the most urgent concerns Tavernelli raises is deindustrialization, the gradual erosion of manufacturing capacities due to international competition and lack of investment. As China and ASEAN economies continue expanding their industrial footprints, Latin America and parts of the U.S. risk becoming mere consumers rather than producers.
The solution, according to Alacero, is not protectionism but regionalism, building strong alliances that allow economies to compete globally as a united front. Instead of isolated responses, a harmonized regional metalmechanic chain could become a powerhouse of innovation, efficiency, and sustainability.
Call to Action: Strategic Investment & Policy Coordination
Tavernelli stresses the urgency of this transformation. Governments, industries, and private investors must prioritize collaborative infrastructure, regional trade agreements, and the development of clean technologies within the metalmechanic chain.
This coordinated effort would not only defend local industries but also future-proof them against global economic shifts. Latin America & the U.S. stand at a crossroads, either act now to reinforce their industrial backbone or face further erosion of economic independence and job security.
Key Takeaways:
• Chinese steel exports rose by 71% between 2020 & 2024, from 69 to 118 million metric tons
• This increase is fueled by Chinese government subsidies & unfair trade practices
• China engages in dumping—selling steel below production cost to dominate markets
• Chinese steel is often produced using environmentally harmful methods
• These practices harm industries in countries with free-market & environmental regulations
• Ezequiel Tavernelli (Alacero) proposes a regional value chain for the metalmechanic sector
• Latin America & the U.S. should integrate infrastructure, production & policy in this sector
• The regional chain would boost local industry, protect jobs & enhance sustainability
• Strategic investment & shared industrial policy are crucial to resist deindustrialization
• ASEAN countries & China continue to grow industrially, threatening unaligned regions
• Regionalism, not isolationism, is key to building resilient and competitive industries
