Steelmakers await impact of tariff policy

United States Commerce Department figures published by the Washington-based American Iron & Steel Institute show imported steel continued to flow into the U.S. in March.

Last week, a statement from an Organization for Economic Cooperation and Development (OECD) committee leader indicates China remains a source of global steelmaking overcapacity.

An April 1 statement from OECD Steel Committee Chair Ulf Zumkley titled “Cooperation needed to end the steel crisis” says Chinese steel exports have more than doubled since 2020, surging to 118 million metric tons (mmt) in 2024, more than total annual North American steel production and similar to that of the European Union last year.

China, which contains about 17 percent of the world’s population, has been producing more than half the world's annual steel total each year since 2015.

The Steel Committee of the Paris-based OECD brought together 293 government and industry delegates from 41 steel-producing countries March 31 and April 1 to discuss international cooperation designed to improve prospects for their steel industries.

“Steel prices and industry profitability continued to decline during 2024, hitting historically low and unsustainable levels in some regions," Zumkley says. "These negative developments have disrupted international markets, resulting in trade actions across a growing number of countries that are likely to persist in the light of increasing excess capacity and sluggish market growth.”

At the same time governments introduce trade actions, Zumkley points to nonmarket policies and practices as “the root cause of the current crisis."

Those practices, he says, continue unabated in some economies where steelmaking capacity is growing rapidly, noting the OECD committee reviewed its latest subsidy monitoring work, concluding that significant Chinese subsidization in 2024, including grants, tax incentives, differentiated electricity pricing and below-market borrowing to steel companies in China and other countries, will worsen steel excess capacity problems and trigger further trade disruptions for steel committee members going forward.

The committee concludes that without policy adjustments in countries that engage in such practices, global excess capacity is expected to rise from an estimated 602 million metric tons in 2024 to 721 million metric tons by 2027, “putting enormous pressures on the viability of even highly competitive steelmakers.”

Measured by earnings reports in most years, American steelmakers—especially recycled-content electric arc furnace producers—have remained relatively competitive.

Nonetheless, the Trump administration has introduced tariffs to protect U.S. mills from the negative aspects of overcapacity.

The tariffs were not in place during most of the first quarter of this year, and the figures published by AISI seem to demonstrate that in their absence, buyers continued to tap into the global market.

AISI reports steel import permit applications in the U.S. for March totaled more than 2.3 million net tons, which representing a 3.3 percent increase from the February final imports total of 2.24 million net tons.

During the first three months of 2025 total steel imports checked in at 7.625 million net tons, up 1.2 percent from the first quarter of 2024.

In March, as the tariff-free window was about to close, the biggest shippers of steel to the U.S. were Brazil (446,000 tons), Canada (396,000), Mexico (350,000), South Korea (246,000) and Taiwan (123,000).