Latin American countries must urgently and jointly act to defend a key pillar of their regional economy and ensure fair competition. This was stated by Ezequiel Tavernelli, executive director of ALACERO. The core issue lies in China's steel overproduction and state subsidies that distort competition. According to the OECD, global excess capacity is expected to reach 721 million tons by 2027, adding 165 million to the current surplus, of which 62.1 million will correspond to China and Southeast Asia. The decline in China's domestic consumption and its policy of maintaining the steel industry as an economic engine have led to a 181% increase in exports of rolled and semi-finished steel, rising from 42 million tons in 2010 to 117 million in 2024. This has flooded the Latin American market, where demand grew by 233% in the same period. Chinese subsidies allow for exports at artificially low prices, up to ten times lower than in OECD member countries like the United States or Germany, generating unfair competition that harms the local industry. The study indicates that Latin America relies almost exclusively on anti-dumping measures (93% of actions), an insufficient tool given the magnitude of the challenge. Investigation processes take an average of 462 days, while the preliminary stage takes 27% longer than in developed countries. A study on commercial defense in Latin America (LATAM), conducted by the Federal University of Uberlândia (Brazil) and published by the Latin American Steel Association (ALACERO), warns that Latin American countries have reacted insufficiently and belatedly to the advance of Chinese steel exports. The research highlights that the lack of robust measures leaves Latin American countries exposed to global excess capacity and practices that distort competition, while developed economies like the United States, Canada, and the European Union implement more effective schemes, recognizing steel as a strategic sector for the economy, industrial security, and employment. Between 2010 and 2023, more than half of the increase in steel consumption in Latin America was absorbed by Chinese exports. In that period, regional consumption grew by 12.2 million tons, while China's exports to the region increased by 6.5 million tons, equivalent to 53.3% of the demand growth. This phenomenon reflects the loss of opportunities for the regional steel industry, driven by a strong increase in Chinese production and a high level of state subsidies. "The international experience is clear: only an agile, diversified, and forceful commercial defense can neutralize the advance of subsidized exports. Inaction or partial and bureaucratic responses leave the steel industry exposed to deep and, in many cases, irreversible damage," the study states. Furthermore, 80.5% of these actions are concentrated in Mexico and Brazil, leaving the rest of the region vulnerable. For effective commercial defense, the region must diversify its instruments, incorporating customs duties, countervailing duties, safeguards, and anti-circumvention actions, in addition to accelerating investigation deadlines and establishing continuous monitoring systems of imports and their impact on industrial value chains, the study indicates.
