There's No Such Thing as Free Trade in Steel: Tai

So Ambassador, if I can jump in, if we can focus just on steel because we’ve got so much to unpack there, let’s take steel. We both know how complex this is and I can share some numbers with our audience, certainly not for your benefit. Direct Chinese imports as you know the estimate is something like 0.6% of total steel demand in the United States. The problem is a lot of this is going through Mexico. So Ambassador a question I heard someone asked recently is how do we make them eat it. So how can you address what is happening in Mexico, How do we stop the steel coming through the back door. So I’m going to impact this back at you in a couple ways. One is to reinforce the point that. When you have a producer, a major major dominant producer like China producing at below market rates, it affects the entire supply chain starting upstream, all the way downstream. The Mexico challenge is a piece of this and again the challenges worldwide. So I think with respect to Mexico, there are a couple pieces. One is to the extent that upstream steel is coming into Mexico. And being worked on and then coming into the United States, you’ve got to figure out how to level the playing field there. Secondly, there’s a much more blunt challenge with respect to steel coming into Mexico and improperly coming to the into the United States as Mexican steel. So there is a challenge with respect to the evasion of trade programs and trade frameworks where steel that’s not properly Mexican is coming in as Mexican steel and enjoying the preferences that we provide to the Mexican economy. Mexican producers, so again with respect to steel production, in order for the United States to continue to be able to produce, to continue to grow our steel industry, to continue to grow cleaner steel industries of what you see is a number of programs that we are putting in place to ensure the integrity of trade systems. The challenge right now is and steel is an excellent, excellent example that there is no such thing as free trade in steel. The market in steel globally is significantly distorted by what we are calling the non market policies and practices coming out of China. Supply that’s being created, production plans that are not linked to demand. And So what happens is you have a significant depression of prices and it requires economies like the United States to work with other economies that want to be opened, that want to openly trade to take more. Significant defensive measures against the unfair practices that have infected the sector.