By JOE WILKINSON and JAMES BOLSONIt may sound like a good idea, but it’s not as simple as it sounds.
The US$1.6bn worth of light steel imported from China in 2018 is equivalent to nearly three years’ worth of goods from China, according to US-based trade publication Euromonitor International.
This is a stark contrast to the past five years, when the US imported about 2.5 times more steel than China in the same period, according the trade journal.
The trade gap is not only because of a rise in steel prices, but also because of China’s rapid economic growth and increasing use of its manufacturing capacity, said Mark Zandi, chief economist at Moody’s Analytics.
China’s steel imports jumped almost 17 per cent to $9.9bn in 2018 compared to the previous year.
That is the highest increase in five years.
But even after the sharp increase, the US remains the biggest exporter of steel in the world, accounting for more than two-thirds of its total exports.
The rise in exports is mainly driven by imports of large amounts of steel that are used to make machinery and cars.
The world’s second-largest economy, China has been importing large volumes of steel from the US since the 1980s, when it was the biggest importer.
Its use has grown dramatically in recent years, thanks to cheaper labour, better technology and better standards, and by cheap imports from countries like India, Bangladesh and Myanmar, according it’s own statistics.
It’s not just the US, however, that has been hit hard by China’s rise.
The EU has seen imports from China rise sharply, while the UK’s exports have fallen.
In September, the EU’s chief economist, Thomas Somburg, said that the EU is “totally dependent” on China for its steel exports.
Somburg said the EU was not just exporting steel to China, but importing steel from countries such as India and Bangladesh as well.
“We have been in a relationship with China since the late 19th century,” Sombourn said.
“China has been supplying us with steel and then taking the same with the Europeans in the 19th and 20th centuries.”
The UK’s steel export has also been a major contributor to the UK economy, with more than £1bn worth imported in 2017 and 2018, the latest figures available.
Seth Moulton, director of UK Steel, which represents the UK steel industry, said he was surprised by the rise in imports, given the industry’s recent economic growth.
“I think it’s a bit of a misnomer to think that the UK is exporting a lot of its steel to the Chinese,” he said.
The UK imports about three-quarters of its global steel production.
However, its export to China has grown significantly since the EU joined the WTO in 2001.
The EU’s steel industry has also suffered from the fall in the value of the pound.
Moulson said that for some years, China had been supplying much of the UK with cheaper steel, which had then been cheaper in other markets.
He said China’s exports to the EU had declined in recent months because of “a realisation that China was becoming less attractive as a market”.
It’s no secret that the Brexit vote, combined with the Trump administration’s protectionist policies, have increased demand for US-made steel, Moulston said.
But he also said that it was not the only reason why imports from other countries were increasing.
“There are a lot more countries doing this, so it is a result of other factors,” he added.
The impact of Brexit on imports from the EU can also be seen in the numbers.
The UK exported 1.2 billion tonnes of steel to Europe in 2018 and imported more than 5 billion tonnes.
In the first three months of 2019, the number of tonnes exported by the UK increased by 18 per cent compared to 2017.
“So this is partly down to the uncertainty around the Brexit outcome,” Moulstons said.
“But it’s also because they are using more steel in Europe, which has been very good for the UK.”
There is no question that the rise of China is having a huge impact on the world’s largest steel exporter.