Why did Feng Yu not participate in this negotiation? It was about the signing of a contract between Polar Bear Mining Group and Huaxia Iron and Steel Company.
Lituo Group and BHP Billiton have completed the merger in terms of iron ore mining and transportation. The next step is of course to find stable procurement targets to ensure profits.
China's demand for steel happens to be increasing significantly, and Lituo Group has just completed the signing of a joint venture agreement with Huaxia Aluminum. It would be more appropriate to talk about a long-term iron ore supply contract.
Everyone who does business hopes to have a stable and honest partner, and when looking for a partner for a new business, many people will choose a partner they have worked with before and trust.
There is no doubt about Huaxia's integrity, not to mention Feng Yu's guarantee. In addition, China allowed the Polar Bear Mining Group to take shares, which also guaranteed Kirilenko's interests, so this matter was facilitated naturally.
However, the signing of this contract may bring about a series of troubles, which are mainly aimed at China's steel companies.
Vale's ores are sold to the United States, where steel is made and sold to other countries and regions. However, the United States now mainly develops special steel products. Most of ordinary steel products are imported.
And their largest importing country is China. China is the world's largest importer of iron ore. Of course, it cannot consume so much steel. Even if China is doing many infrastructure projects, it must export.
Asia, Europe, and the Americas are all exporting, and they are slowly opening up sales. Because of what, because the price is cheap and the quality is high.
In the past, China's steel was synonymous with inferior quality. Later, China also discovered that steel was a strategic material. Therefore, under the blockade of European and American technology, it invested a lot of research and development funds and developed its own technology. In some aspects, it was better than Europe and the United States. more developed.
In addition, the wages of steel mill workers in China are generally not very high, and many of them still follow the old tradition and value dedication. Therefore, the cost of steelmaking in China has become very low, much lower than that in Europe and the United States.
China transported steel to the other country's port, but it turned out to be cheaper than the other country's steel. This put American steel plants under serious threat, and it was very likely that the products would not be sold.
In fact, the production capacity of the United States' own steel plants is enough to ensure the use of the United States, so this may cause a problem, that is, the United States will impose sanctions on China's steel exports, as long as China's steel products are dumped against the United States.
Then not only can they be fined, but they can also collect import surcharges, which are retaliatory and punitive tariffs, to protect the interests of their domestic companies.
At the beginning of this year, the United States had already done this. Their Steel Workers Union claims that China's automobile tire exports to the United States disrupt the U.S. market freedom, so punitive tariffs should be imposed on Chinese tires for three consecutive years.
The United Steel Workers have a hand in everything related to steel.
To put it bluntly, this is a kind of local protection. Who made China's exports grow too fast now, seriously threatening the interests of the United States? And it’s not just the interests of the United States, but also the interests of many countries such as the European Union.
Why was it difficult for China to enter the WTO in the first place? Many countries believed that once China joined, it would have a catastrophic impact on their country's manufacturing industry because they would not be able to compete with Chinese companies.
But in the end, China's entry into the WTO was promoted by the United States, because the United States wanted to open up the Chinese market and could no longer protect each other so much.
At first, the United States made a lot of money, but now we find that China seems to be making more, and the United States is starting to suffer losses.
China's tire exports to the United States have increased nearly four times in recent years, which is too fast. This aroused the vigilance of relevant companies in the United States. They found that although the market was growing, more money seemed to be made by Chinese companies.
Due to the economic crisis, Americans are starting to buy bargains. America's own tire companies, such as Goodyear, have become less competitive.
At that time, Feng Yu secretly found someone to help him get the punitive tariffs cancelled, but China also secretly provided some other compensation, such as the purchase of US treasury bonds this time, which was a compromise.
Of course, at the same time, China also fought back and levied high tariffs on some export products from the United States. China seriously suspected that this was because China no longer imported genetically modified foods and seeds from the United States.
At this time, China is more confident, that is, Polar Bear Mining Group has acquired Lituo Group, which can affect the price of ore and other raw materials to a certain extent.
The United States has always been a big importer of raw materials. Now that China no longer sells them, we keep the raw materials and produce them ourselves. Let the cost of raw materials in the United States rise by one level, and then make your products even less competitive internationally.
It is precisely this that caused the United States to fight back again. They also want to impose sanctions on China's steel products, impose penalties, and impose punitive tariffs.
In fact, if it is just a confrontation with the United States, China will not worry at all. Both sides will lose, and the United States will suffer even greater losses.
However, according to WTO rules, if China accepts these penalties, other countries can follow these plans. For example, the European Union, island countries, etc. can also impose penalties on China's products and impose punitive tariffs.
As a result, China's overall exports in the industry will suffer a major blow, and China will suffer even greater losses. This may trigger a wave of boycotts of China's export products.
It seems that this is the U.S.'s counterattack against China's delay in purchasing U.S. government bonds. We have already agreed, but you China is adding conditions. Isn't this a bit too much? We in the United States are short of money now, but we are not willing to be bullied.
In fact, there are also many conflicts between China and the EU. For example, the photovoltaic industry also wants to rule on dumping. China's photovoltaic industry is mainly Feng Yu's investment, thanks to the help of the state, otherwise that part of the industry will greatly reduce Feng Yu's profits.
Of course, this will also reduce China's tax revenue and reduce the income of those corporate employees.
In fact, Polar Bear Mining Group's acquisition of Lituo Group has been publicly criticized many times by the European Union, the United States, etc., but they have all been pushed back by Russia, which also represents Russia's interests.
Now it is building a joint venture with a Chinese steel company to produce steel, which will once again arouse the sensitive nerves of Europe and the United States. Feng Yu deliberately avoided Reed and did not give Reed the opportunity to communicate with him immediately. He wanted to see what choice the United States would make.
If sanctions are still required, then Feng Yu will not invest another dime in the United States!
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