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China is currently the largest producer of steel in the world. Steel is currently the most recycled material in the world, the industry estimates that of new metal produced each year some 42.3% is recycled material.
Dr. Thomas J. Usher, former chairman and CEO of the U.S. Steel Corporation, was recently interviewed by FrontPageMagazine about the influence of foreign VAT taxes on steel exports and imports. The article paraphrases Dr. Usher as follows – using an example where the local price of steel for the United States, China and Germany is $100: “As that U.S. steel goes to China, it gets hit with a 17 percent VAT that raises the price of that steel to $117 in China; on the contrary, when that China steel is exported to the United States, China applies a 13 percent VAT rebate, bringing it down to $88.89. Likewise, Germany does the same thing with a 16 percent VAT and a 16 percent VAT rebate. So, their governments are giving them advantages that U.S. steelmakers do not get from our government… Over the last decade, the cost of steel from a labor standpoint has dropped from about 50 percent of the sales dollar to about 17 percent. As for the costs of any producer bringing steel into this country … well, we can match that anywhere. So, it’s not a question of lower efficiency or lower cost. It’s more a question of whether you’re going to allow those steel producers from other countries to bring in steel and price it -- on a short-term basis -- at a price below their production, with the help of those governments.” (cited from FrontPageMag.com, October 23, 2007)
-- FrontPageMagazine, October 23, 2007
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