China has started a 10 trillion yuan (USD 1.4 trillion) program to refinance the debt of local governments to support its economy. Under this plan, the debt ceiling of local governments will be increased to 35.52 trillion yuan and they will be able to issue an additional six trillion yuan of special bonds within three years. They will also be able to use a total of another 4 trillion yuan of new bond quotas over five years.
This step is aimed at reducing China's financial risks and stimulating economic growth. The plan was approved by the Standing Committee of the National People's Congress.
On the other hand, the trade measures taken during the administration of former US President Donald Trump brought new tariffs on Chinese steel exports to the agenda. Trump has indicated that he intends to increase tariffs on Chinese steel products, which could have a negative impact not only on steel exports but also on consumer products made with steel, such as vehicles and household appliances. It was also reported that the Trump administration plans to impose tariffs of up to 60% on some Chinese goods.
However, a reduction in Chinese steel exports to the US could boost US imports from other countries and create new opportunities for China to increase its steel exports to other markets. A Shanghai analyst said that China could take advantage of this situation and increase its exports to other countries.
On the other hand, another exporter operating in the stainless steel sector suggested that the Trump administration's possible efforts to reduce tensions in the Red Sea region could reduce international transportation costs. It was emphasized that the decrease in transportation prices could positively affect steel exports.
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