Tampa Prep 2009-2010 Impact Defense File



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AT: Steel Industry



China’s rapidly expanding steel industry is already limiting the power of our domestic industry

Muellers 7 (Dr. Hans, The U.S. Steel Industry and national defense, 1/30, http://www.aiis.org/index.php?tg=fileman&idx=get&id=1&gr=Y&path=Reports&file=US+Steel+_+Defense+I.doc)

C: Major Threats There are two threats to the domestic steel industry’s ability to maintain its strength in the commercial market and, on that basis, its vital role as a defense industry supplier: States. The other is foreign government subsidies for the purpose of stimulating the growth of steelmaking capacity. China Unquestionably, steelmaking capacity in China has expanded at an unprecedented rate, as is illustrated by the relevant numbers contained in the Report. Unfortunately, much of the remaining discussion is considerably off the mark. This is difficult to explain, given the wealth of available information about the internal Chinese politics of industrial growth and the struggle among the fiefdoms of power. Are the authors of the Report so overburdened with work that they do not have the time to keep up with even the most essential readings? Alternatively, they might be unwilling to perform alterations on their slogans, once they set them afloat, for fear of not being consistent (consistency being a core virtue of the U.S. steel industry). At any rate, word must have gotten around to them by now that the central government of China lacks the capability of keeping a tight rein on its steel industry. In fact, no one seem to have much control over the entire industry. However, individual provinces hold a great deal of sway over the actions of steel companies operating within their boundaries. Each province is pushing for growth, because that is what maximizes their tax revenue. The provinces harboring the bulk of China’s steelmaking capacity have shown little interest in coordinating their policies regarding the steel companies in their respective domains or, for that matter, in promoting mergers across provincial boundaries. Consequently, there is a chaotic aspect to the manner in which the industry expands both capacity and export volume as well as to steel pricing. For this reason, any discussion of industrial or trade policy cannot totally circumvent some distinction regarding the division of labor and the division of power between the central government and the provincial governments. In many instances, local authorities as well have some influence over the actions of companies in their region. From their high-altitude view of China, the authors of the Report fail to discern such distinctions. Instead, they insist on the use of such non-specific and, in the case of China, not very meaningful terminology as “China’s government remains intimately involved in the steel industry,” “the growth of China’s steel sector has been heavily influenced by government intervention,” and “government-directed industrial policy.” As noted, they may have thought these terms up years ago, felt comfortable with them and—regardless of non-congruent evidence, decided to stay with them. How happy the (central) government bureaucrats in China would be if they commanded the kind of control over the steel industry which the Report attributes to them. Another problem has to do with the discussion of China as a non-market economy (NME). In NMEs, most businesses are publicly financed, owned and controlled. To call such funding a subsidy, as the authors of the Report do, therefore makes little sense. They also apply that appellation to acts of ”favorable tax treatment as well as export-credit and R&D support.” The question arises, compared to what? Did the authors take the trouble of thoroughly investigating the Chinese tax, export-credit and R&D systems and then to verify that, on average and over an extended period, the steel industry was taxed at a lower rate and received more support in the other two areas than a large sample of other heavy industries in China? If they did, they might have been so kind as to furnish a few of their sources plus some more detailed findings. Subsidization Any reader who made it this far should be warned, the worst is still to come. It comes in the form of a relentless pounding with sickeningly repetitious verbiage aimed at the ominous policies of unidentified foreign governments. There is “government support and aid” that “inevitably contribute to excess production and market-distorting international competition.” But it is the last two short paragraphs--bristling with references to “foreign government intervention,” “measures taken by foreign governments,” “inappropriate foreign government interventions,” and “continued foreign government interventions”—that should leave no doubt in a reader’s mind that foreign governments are insidious and they are trying to get us Many will not be able to resist being captivated by such a high-caliber and profoundly enlightening investigation. However, others may conclude that—to paraphrase an expression in the last paragraph—the domestic steel industry is in serious jeopardy, if this Report represents its best efforts in the area of economic analysis.

The innovation of more advanced weapons makes steel a necessity of the past

Arabe 1 (Katrina, journalist at ThomasNet Industrial Newsroom, Debating the Roles of Steel & Nuclear Recycling in the Military, September 7th, http://news.thomasnet.com/IMT/archives/2001/09/debating_the_ro.html) //am

Martin Anderson, a senior lecturer in management at Babson College in Wellesley, Mass, does not agree. He depicts the scenario of being cut off from a steel supply as highly unlikely. Rather, he says, the U.S. would probably "take over the foreign source with nuclear weapons." If the U.S. were cut-off, he believes recycling available scrap would be a sufficient enough source of materials. In addition, Anderson is opposed to the protection of domestic steel from foreign markets. In his words, "the easiest way to keep a domestic industry is to open it to the full forces of global competition." Robert Reich, a former U.S. Secretary of Labor and current professor of social and economic policy at Brandeis University in Waltham, Mass, takes a similar view. He feels that steel is less critical to national defense than in times past. He believes that, "new technologies [have] provided many substitutes for steel."


Breakthroughs in intelligence trump the need for domestic steel

Arabe 1 (Katrina, journalist at ThomasNet Industrial Newsroom, Debating the Roles of Steel & Nuclear Recycling in the Military, September 7th, http://news.thomasnet.com/IMT/archives/2001/09/debating_the_ro.html) //am

Finally, Edward Turzanski, a political science professor at LaSalle University in Philadelphia, believes that traditional assets such as provided by the steel and petroleum industries are no longer as important in the face of international conflicts. He would rather see the further development of breakthrough technologies that aid military intelligence. In Turzanski's words, "By far, the most important areas of technological challenge are maintaining qualitative advantage in air delivery of military personnel, material, and ordnance - - and [in] those technologies which allow the U.S. to discern the capabilities and motives of allies and adversaries."




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