Steelmakers Await Impact of Tariff Policy

AISI

Global Overcapacity and U.S. Imports Shape the Steel Market

Steel imports into the United States continued at a steady pace in March, even as the Organization for Economic Cooperation and Development (OECD) warns that China’s steel production remains a significant factor in global overcapacity. According to the U.S. Commerce Department and the American Iron & Steel Institute (AISI), steel imports rose slightly in March, while China’s steel exports surged to levels surpassing the entire annual steel production of North America.

China’s Steel Output and Global Overcapacity Concerns

An April 1 statement from OECD Steel Committee Chair Ulf Zumkley highlights China’s steel exports, which have more than doubled since 2020 to reach 118 million metric tons (mmt) in 2024. This figure nearly matches the total steel production of the European Union and significantly impacts global trade. Since 2015, China has consistently produced more than half of the world’s steel, creating challenges for other steel-producing nations.

At a recent OECD Steel Committee meeting attended by representatives from 41 countries, delegates discussed the impact of China’s growing steel capacity. Zumkley pointed to ongoing "non-market policies and practices" such as subsidies, tax incentives, and below-market borrowing in China that contribute to overcapacity issues and distort global trade. Without policy changes, the OECD forecasts global excess capacity will rise from 602 mmt in 2024 to 721 mmt by 2027, placing immense pressure on even the most competitive steelmakers.

Impact on U.S. Steel Industry and Trade Measures

Despite overcapacity concerns, U.S. steel imports increased slightly in early 2025. According to AISI, steel import permit applications in March totaled more than 2.3 million net tons, a 3.3% increase from February’s final import total of 2.24 million net tons. For the first quarter of 2025, total steel imports reached 7.625 million net tons, a 1.2% increase over the same period in 2024.

The largest steel exporters to the U.S. in March included Brazil (446,000 tons), Canada (396,000 tons), Mexico (350,000 tons), South Korea (246,000 tons), and Taiwan (123,000 tons). These numbers reflect continued demand for imported steel even as the U.S. government implements new trade measures.

Tariff Policy and Future Implications

President Donald J. Trump’s administration has reintroduced tariffs to shield domestic steel producers from the negative effects of global overcapacity. These tariffs were not in place for most of the first quarter, allowing for increased steel imports. However, their reimplementation is expected to impact trade flows moving forward.

While U.S. steelmakers, particularly those using electric arc furnace (EAF) technology, have remained competitive, continued global overcapacity poses risks to profitability. Industry leaders will closely monitor the effects of new tariffs and trade policies as they seek to navigate the evolving market landscape.