Combating Global Steel Excess Capacity: Policy Proposals for the United States, Japan, and the Global Community

Sonja Schaefer, Legislative Assistant, U.S. House of Representatives
June 26, 2019

Legislative Assistant Sonja Schaefer participated in the Sasakawa USA 2018-2019 In-Depth Alumni Research Trip to Japan. In this paper, Schaefer outlines a brief historical background on the development of global steel excess capacity and analyzes two of the world’s largest producers and consumers of steel, Japan and the United States, in an effort to assess how they can influence a global reduction in steel excess capacity.

Executive Summary

Sonja Schaefer, third from left, traveled to Japan in November 2018 to conduct research for this paper.

This policy paper proposes methods to combat global steel excess capacity and draws upon a synthesis of published material and approximately 20 first-person interviews with government officials, industry representatives, and academic experts in Tokyo, Japan, and Washington, D.C.

This policy paper provides a brief historical background on the development of global steel excess capacity and analyzes two of the world’s largest producers and consumers of steel, Japan and the United States, in an effort to assess how two major players can influence a global reduction in steel excess capacity. This analysis illustrates governmental interventions in steel industries and depicts the current status of global steel excess capacity, which is largely caused by subsidized steel production in China. Further, this paper characterizes and critiques the Global Forum on Steel Excess Capacity (GFSEC) and presents multiple alternative policy proposals for the global community to address excess capacity. Finally, this paper argues for a specific policy prescription for the United States and Japan to combat global steel excess capacity through bilateral trade agreement language, as well as a renewed emphasis on multilateral engagement in the GFSEC and regional trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Read Combating Global Steel Excess Capacity: Policy Proposals for the United States, Japan, and the Global Community

About the Author

Sonja Schaefer currently works as a Legislative Assistant handling a portfolio of issues including foreign affairs, trade, labor, immigration, homeland security, and appropriations, for a Member of the U.S. House of Representatives. Her previous experience includes working as an economic research assistant investigating illicit financial flows in East Africa at the International Law and Policy Institute in Oslo, Norway, as well as working as a research assistant with the University of Macau studying Chinese investment in Ethiopia. Schaefer speaks advanced Mandarin Chinese and spent 5 months living in Beijing and studying Mandarin at Beijing Foreign Studies University. She aspires to be a specialist in Asia-Pacific trade and investment.

Schaefer holds bachelor’s degrees in both Economics and Chinese Studies from Pacific Lutheran University, and concentrated her theses on economic policy in East Asia.

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