G-20 calls for fight against market-distorting subsidies

A key passage in the G-20 communiqué calls on world leaders to "urgently" seek the elimination of "market distorting subsidies and other forms of support from governments and related organizations." These demands were much tougher than those adopted at last year's G-20 summit in Hangzhou, China.

G-20 leaders agreed to address rising excess capacity and low prices in global steel markets, succumbing to pressure from the Trump administration after it threatened to impose punitive tariffs on its allies.

The United States is a net importer of steel used for construction and infrastructure. But President Donald Trump pledged during his campaign to help revive the steel industry and said the US could not risk relying on metal imports for reasons of national and economic security.

The joint statement calls on G20 members to "fulfill their commitments to enhance information exchange and cooperation by August 2017 and quickly develop concrete policy solutions that reduce the excess steel surplus."

The data and proposed policy solutions will then be published in the OECD Global Steel Surplus Forum report in November, according to the published communiqué. The text of the report of the G-20 members speaks of the need to make progress towards the G-20 summit in Argentina in 2018 in Buenos Aires.

The text is a blow to President Xi Jinping, who has resisted Washington's efforts to directly blame his government for overcapacity and lower prices for steel products.

Despite China's commitment to slashing the country's annual steel capacity by as much as 150 million tonnes by 2020, US and European regulators say Beijing hasn't done enough to curb government subsidies on steel and other products.

In addition, the text of the July 8 communiqué recognized the right of members to use "legal trade defense tools" to address "unfair trade practices" - something that retains Trump's ability to impose tariffs in the future.