MUMBAI: India should be wary of taking lessons from the Trumpian style of steel economics as well as the Chinese style of state-sponsored steel capitalists as both of them are toxic to the global steel economy, Atanu Mukherjee, president, MN Dastur & Company said on Wednesday.
Mukherjee who presides over the engineering services consultancy that has been associated with the setting up of many steel plants in India, including Tata Steel's Jamshedpur plant, was referring to the recent imposition of tariffs on steel and aluminium imports in the US by president Donald Trump.
"We must stand tall and be wary of taking any lessons from the Trumpian style of steel economics or the Chinese style of state-sponsored capitalism," Mukherjee said addressing the gathering at the International Metal and Foundry Expo that kicked off on Wednesday. "Trumpian trade jingoism is likely to cause US more than 200,000 jobs and has the potential to cause a trade war where the entire world will be worse-off," he said.
Also referring to the Chinese way of making and selling steel, Mukherjee said that Chinese style steel capitalism "de-stabilises the entire world with humongous excess capacity that leads to predatory dumping and countries putting up steel trade walls that disturb the markets for steel". This has been happening for the last ten years, he said.
Mukherjee also pointed out to the untapped strength that India possesses in the area of steel-making and selling. Among the points that he listed as a steel expert that could propel the country towards global steelmaking excellence, Mukherjee said the country has the potential to earn an excess of $80-100 EBITDA per tonne of steel if it takes care of a few aspects like getting flexibility in their plants which makes incremental capacity addition cost-effective, improving productivity, as well as taking advantage of its 7,000 km coastline for transportation of raw materials and finished goods.
Donald Trump announced a few days back that it will be imposing an import tariff of 25% on steel as well as 10% on aluminium as it is hurting domestic producers and is dangerous to the national security that makes use of such metals. This move has given rise to fears that it could trigger a global trade war as countries that are hurt by Trump's move may resort to retaliation.
Steel magnate Sajjan Jindal who chairs JSW Steel has reponded by asking the Indian government to replicate US in the imposition of tariffs to protect its own steel producers.
Source: economictimes.indiatimes.com