China's unfair trade practices in the steel industry have flooded the Latin American market with cheap steel, threatening regional producers' jobs and livelihood. China's production affects Latin American economies, putting at risk 1.4 million jobs in the steel sector. China's strategy of selling steel below market prices has triggered a dumping situation, with China's share of global crude steel production reaching 54 percent. The slowdown in China's real estate and construction business has caused domestic demand for steel to decline, leading Chinese steel producers to look to Latin American countries with fewer trade barriers. The Chinese government subsidized steel production and exports during the pandemic, causing a wave of cheap Chinese steel to spread around the world.
Mexico, Chile, and Brazil have increased tariffs on steel imports from China to protect domestic companies. The Latin American Steel Association (Alacero) stated that cheap Chinese steel is causing several large companies in the region to freeze or shut down operations, leading to a process of deindustrialization. The steel industry in Chile and Colombia has been severely affected by Chinese dumping, with companies suspending operations and calling for fair competition. Brazilian steel producer Gerdau has temporarily laid off workers due to China's unfair competition. Chinese steel production emits more carbon dioxide than Latin American steel mills. The imposition of tariffs on Chinese steel may lead to trade tensions between Latin American countries and China. China has previously used coercive diplomacy, such as banning soy-based products from Argentina and suspending purchases of Canadian canola seed, in response to trade disputes. The United States has an opportunity to coordinate with Latin American countries to mitigate China's unfair trade practices and protect their domestic industries. [140763e4] [517c502b]
