The United States has few competitive advantages left these days, particularly when it comes to trade with China. That’s why I was so pleased to hear that the U.S. Congress is looking out for the little guy, via the American steel industry, in the relentless war against sneaky Chinese foreign investment. The latest news warmed my heart:
A bipartisan group of 50 US lawmakers called on Friday for an investigation into whether a Chinese investment in the US steel sector should be blocked on national security grounds.
The Congressional Steel Caucus, in a letter to Treasury Secretary Timothy Geithner, said it was “deeply concerned” the recently announced joint venture between Anshan Iron and Steel Group’s and the Steel Development Co also threatened American jobs.
God bless ’em. I think anyone would agree that the proposed twenty percent investment in a USD 175 million rebar facility in Mississippi is really outrageous. After all, as was very clearly pointed out in the letter to Tim Geithner, this deal undoubtedly threatens American jobs and national security.
What, you can’t see the obvious connection here? Well, at the risk of offending the vast majority of my readers who are quick on the uptake, let me spell this out in more detail.
Fact: As the Congressional Steel Caucus so rightly notes: “Anshan is China’s fourth-largest steel producer and the product of massive Chinese government subsidies.”
Fact: Everyone knows that the company is controlled by China’s Assets Supervision Commission of the State Council (SASAC), which means that the company is merely a tool of the Communist Party. With all of those subsidies, Anshan is definitely up to no good.
Fact: Anshan is also known as Anshan Steel, Anshan Iron & Steel, and Angang. Why so many names? This is suspicious and suggests sneakiness.
Fact: So far this year, the U.S. Department of Commerce has imposed countervailing or anti-dumping duties on a variety of China steel products. Obviously we cannot trust anyone from this industry, which is unfairly targeting U.S. jobs and profits. If they are willing to sell us steel at a low price, there is no telling what they might do next.
Fact: The economic powerhouse that is the Mississippi high-tech economy is just now emerging from an usually long slump and needs protection now more than ever.
Fact: The manufacture of reinforcing steel bar — also known as rebar — is based on technology first developed by the Defense Advanced Research Projects Agency (DARPA) during the Cold War and commercialized by a joint venture between Dean Kamen and Stephen Hawking (the JV holds the patents, valued at over USD 75 billion). If the Chinese get their hands on advanced rebar technology, this would enable them to build concrete platforms robust enough to reach low earth orbit.
The danger seems rather self-evident, so I expect that Secretary Geithner will recommend a CFIUS review of this transaction, which will result in Anshan being booted out of Mississippi, where they clearly don’t belong.
In the interest of fair and balanced journalism, I should point out that each and every one of the facts cited above are either incorrect or presented in a very misleading manner. CFIUS has no business reviewing a tiny investment in a rebar factory (rebar!) in Mississippi, a place that desperately needs investment and new jobs.
The indisputable fact that the investment is a minority equity position that would grant Anshan absolutely no control was conveniently left out of the letter sent to Secretary Geithner. All of the thinly-veiled suggestions about Anshan doing the express bidding of Beijing are therefore irrelevant. Moreover, the facility is expected to generate less than three tenths of one percent of total U.S. rebar production. I will not bother to address the danger of valuable rebar technology falling into the wrong hands; I don’t want to encourage that sort of idiocy.
This is what protectionism gets you. Here we have a new factory that will bring good jobs to a struggling locale, and yet the Steel Caucus has the temerity to claim that the deal will threaten American jobs. This is not twisted logic, it is utter nonsense.