CGTN Europe interviewed Hosuk Lee-Makiyama, Director, European Centre for International Political Economy (ECIPE)
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00:00Let's get more on this with Hosok Lee Makiyama, Director of the European Centre for International Political Economy.
00:05Welcome back to CGTN. Why do you think that Donald Trump has decided to take this step and why now?
00:13Nice to be back and sorry my affiliation is a mouthful.
00:17Yeah, sure. It's actually a long-term structural problem that the steel industry has been suffering.
00:24In the last 15 or so years, we have seen the global capacity in the steel industry basically doubling.
00:32And that basically entails that in order to protect the domestic market, you have two choices.
00:38One is to raise the parish, as Donald Trump has done consequently, and so has the EU and many other countries, by the way.
00:46And the other one is to attract investments, which the United States has also tried to do, although it has pulled a handbrake by blocking deals like, for example, Nippon Steel's purchase of US steel.
01:02And do you think EU countermeasures could have any impact?
01:05Yes and no. Well, the fact is that there is no international commodity market when it comes to steel and other strategic commodities anymore, simply because too many countries have taken these measures.
01:20EU itself has taken the safeguard measures in addition to anti-dumping measures against China.
01:27So basically what we are seeing here is domestication of all the commodity markets when it comes to at least steel and aluminum.
01:35So would high tariffs eventually help US steel and aluminum, American steel and aluminum producers in the long run?
01:45Well, you have to pursue both, i.e. if you're putting barriers up, you must allow for increasing the capacities and foreign ownership.
01:56Obviously, there is a lot of money flying around amongst US investors, but steel is perhaps not the most obvious area you would go into.
02:05Considering the growth opportunity that is in so many other fields.
02:11So attracting foreign direct investment and especially in specialty products that the US defense production depend on is going to be key.
02:20That means that the United States would have to open up a foreign direct investment for at least from allies like Europe and Japan, which it has been sometimes reluctant to do.
02:31And in other areas, when it comes to basic steel, the United States have actually expanded the capacity thanks to investments from Europe.
02:41In fact, actually, the total volume of previous European exports to the United States have been duplicated through new investment, new steel mills inside the United States in the Rust Belt.
02:53And, Hosok, this latest ramp-up of tariffs, how might that impact US-China trade tensions, especially following Donald Trump's recent accusations against China on critical minerals?
03:06Well, my advice when it comes to, well, not just Donald Trump, but any US leader is don't look what they say, look what they do and what their objectives are.
03:19I think US-China deal is perhaps much closer to coming to fruition than, let's say, US-Europe, because in the end there are some strategic overlaps, especially in the area of investment, where they could come to an understanding.
03:38We have to bear in mind also that almost all of Chinese trade with the United States have been under tariffs, and it's not such a big problem anymore, because these costs are already counted in.
03:54Hosok, always really good to get your thoughts. Thank you so much for your time today.
03:57That's Hosok Glimaki. I'm a director of the European Centre for International Political Economy.