[SMM Hot Topic] The US Imposes a 25% Tariff on Steel and Aluminum Imports from All Countries! What Is the Impact on China's Steel Exports?

[SMM Hot Topic] The US Imposes a 25% Tariff on Steel and Aluminum Imports from All Countries! What Is the Impact on China's Steel Exports?

• Timeline of US Tariffs on Chinese Steel Products
• 2017April 20

The US Department of Commerce, at the request of the US President, initiated a Section 232 investigation into imported steel products. On March 8, 2018, President Trump signed a proclamation imposing a 25% tariff on imported steel products.

• 2024H1

President Biden announced tariffs on various Chinese imports, including semiconductors, batteries, solar cells, and steel. Tariffs on steel and aluminum products were raised from 0-17% to 25%.

• 2025February 1

The US announced a 10% tariff on Chinese imports, along with a 25% and 10% tariff on imports from Canada and Mexico, respectively. The policy was initially set to take effect on February 4, 2025. Before the tariffs took effect, the US adjusted its policies for Canada and Mexico, granting a 30-day grace period, while maintaining the tariffs on China.

• 2025February 10

Trump stated that he would announce a 25% tariff on steel and aluminum imports from all countries on Monday (February 10).

• Direct Export Risk Assessment: China's Direct Steel Exports to the US Account for Less Than 1% of Total Volume, Limited Impact on Steel Exports

Figure 1 - Share of China's Steel Exports by Country in 2024

Source: SMM, National Bureau of Statistics (NBS)

According to data from the General Administration of Customs, China exported a total of 110.716 million mt of steel from January to December 2024, up 22.7% YoY. China's steel exports continued to grow in 2024, reaching the highest level in nearly a decade.However, the share of exports to the US remained below 1%, further declining from 2023 to just 0.8%.China's steel exports have also been expanding to new destinations, with more shipments to ASEAN and Belt and Road countries.Overall, the tariff hike has a relatively small impact on China's direct steel exports. However, the earlier 10% tariff on all Chinese exports to the US, including downstream steel products such as construction machinery, home appliances, and NEVs, could limit these exports and indirectly affect the scale of steel exports.

• Transshipment Risk Assessment: The US Ranks Second Globally in Steel Imports, Vietnam's Exports to the US Up 143% in 2024

The US has consistently ranked as the second-largest steel importer globally. The 25% tariff on steel and aluminum imports from all countries will significantly impact global steel trade. China's transshipment trade to the US may also be forced to shrink.

Table 1 - Global Steel Imports by Country, 2022-2023

Source: World Steel Association

In 2024, the US imported 28.86 million mt of steel, up 2.5% YoY. By product type, imports of cold-rolled, galvanized, and tin-plated thin sheet materials saw the largest increases, while imports of rebar, HRC, and steel pipes showed smaller increases or even negative growth.Figure 2 - US Steel Imports by Product Type in 2024

Source: American Iron and Steel InstituteBy country, Vietnam saw the largest increase in steel exports to the US, reaching 1.363 million mt in 2024, up 143%, ranking fifth among US steel import sources (up from ninth in 2023). Additionally, imports from Taiwan, Turkey, the UAE, and Romania also grew significantly, while imports from Mexico, Canada, China, and Italy declined sharply.

Figure 3 - US Steel Imports by Region in 2024

Source: American Iron and Steel Institute

In terms of import channels, China is not a major supplier of steel to the US. However, transshipment trade has been common in recent years. For example, a large Chinese steel company maintained its US export share after the US imposed anti-dumping and countervailing duties by using a transshipment model through Southeast Asia. The company shipped carbon and alloy steel wire rods to Malaysia, completed customs clearance and container changes there, applied for local certificates of origin, and successfully shipped the goods to the US market, avoiding tariffs as high as 303.56%.It is not hard to imagine that China's significant steel exports to Vietnam in recent years may have been a key driver of Vietnam's increased exports to the US. If the US raises steel import tariffs across the board in the future, China's transshipment trade to the US will be impacted.

Summary of US Steel Tariff Policies for Major Importing Countries in 2024:

US Steel Tariff Policy for Canada in 2024:

Certain duty-free quotas are granted. Beyond the quotas, a 25% tariff is imposed on imported steel products under Section 232.

US Steel Tariff Policy for Brazil in 2024:

• Certain duty-free quotas are granted. Beyond the quotas, a 25% tariff is imposed on imported steel products under Section 232.US Steel Tariff Policy for Mexico in 2024:

Starting July 10, 2024, a 25% tariff is imposed on steel products not melted and poured in Mexico, the US, or Canada under Section 232 of the Trade Expansion Act of 1962.Starting July 10, 2024, a 25% tariff is imposed on Mexican imports containing Chinese steel.

• Other steel products theoretically enjoy duty-free treatment.

US Steel Tariff Policy for South Korea in 2024:Certain duty-free quotas are granted. Beyond the quotas, a 25% tariff is imposed on imported steel products under Section 232.

• US Steel Tariff Policy for Vietnam in 2024:

A 25% tariff is imposed on imported steel products under Section 232.If Vietnam's steel products are found to circumvent tariffs, such as the case in 2019 when the US imposed punitive tariffs of up to 456% on stainless steel and cold-rolled steel products originally from South Korea and Taiwan, China, and processed in Vietnam before being exported to the US, high punitive tariffs will be imposed based on specific investigation results.

•  SMM is closely monitoring the progress and impact of anti-dumping investigations on steel overseas. For more information, follow SMM's official account for related reports.