Europe and China Fighting Over
China has been mass producing and marketing cheap steel as only China can, and that has
been a consistent thorn in the side of European steel mills who can’t compete on price or
output. But that hasn’t stopped the EU from trying to level the playing field.Recently, the
European Commission announced additional anti-dumping taxes on pipes and tubes made
from Chinese iron and steel. These “duties” are a backside attempt to slow the flow of
relatively inexpensive metal from China … there’s really no easy or politically expedient
way to stop it. Regulators say the tariffs were assessed after they found that China had
been drastically undercutting European manufacturers on price, which had a negative
cascading impact on various European industry and local economies.
Chinese officials are already fighting back, saying Europe’s response has been unfair, and
the results are based on biased investigations. China has a lot to lose if it ends up with
less or a market in Europe. During the global building boom, Chinese steel and other
building materials were all the rage in both Europe and the United States. Then, when
building cooled off, demand plummeted, and China didn’t have the demand at home to
keep up with the production or to fund the production apparatus built to maintain
previous supply for the demand. Now, China has a manufacturing infrastructure that
became dependent on exports to keep up its growth. The country views any measures
meant to level the playing field as designed to penalize an economy that much of the first
world depended on not that long ago. Naturally, there are a lot of people who are
unhappy with this development.
Meanwhile, both in Europe and the United States, strong nationalist political factions as
well as frustrated and out of work domestic manufacturing employees bristle at the
thought of Chinese imports and cheer when their nations rebuff the Chinese.
Political decisions like this can have far-reaching and multifaceted consequences for
leaders in business and politics as well as the people who buy from them and vote for
them. Messaging on this has to be crystal clear, or it can go sideways in a hurry. If people
are paying more for steel products, they want to have a very good reason … and if that
reason is seen as “just” political … things can get hairy, and quick.
So, now that the political decision has been made, the public relations campaign to
convince constituents of why it’s a good deal has to ramp up, and quickly.
Euguene Schneur is a real estate mogul and the co-founder of Omni New York.