Title: An empirical exploration of Chinese imports and the US steel industry

Authors: Myeong Hwan Kim; Yongseung Han; Carolyn Fabian Stumph

Addresses: Department of Economics, Indiana University-Purdue University Fort Wayne, 2101 E. Coliseum Boulevard, Fort Wayne, IN 46805, USA ' Department of Economics and Finance, University of North Georgia, 1201 Bishop Farms Pkwy, Watkinsville, GA 30677, USA ' Department of Economics, Indiana University-Purdue University Fort Wayne, 2101 E. Coliseum Boulevard, Fort Wayne, IN 46805, USA

Abstract: The paper identifies four key issues concerning the relationship between Chinese imports and the US steel industry: currency manipulation, state-owned enterprises, subsidisation, and environmental regulations. Given these issues, we run a regression to empirically explore the relationship between Chinese imports and US steel prices. We found that Chinese imports have two conflicting effects: one is to lower US steel prices while the other is to increase the prices via China's increasing market share. The overall impact is that Chinese imports increase US steel prices, as the effect due to market share is larger than the demand effect. With these findings, we suggest that, of the four effects considered, Chinese subsidisation is the most crucial.

Keywords: US steel industry; international trade; USA; United States; Chinese imports; China; steel prices; currency manipulation; state-owned enterprises; SOEs; subsidisation; environmental regulations; subsidies.

DOI: 10.1504/IJTGM.2016.077853

International Journal of Trade and Global Markets, 2016 Vol.9 No.3, pp.272 - 285

Received: 27 Jul 2015
Accepted: 16 Dec 2015

Published online: 17 Jul 2016 *

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