President Donald Trump is unleashing sweeping import tariffs that he says will reverse the decline of America’s steel towns. But the US isn’t the only nation rushing to protect its factory heartlands. The US will charge 25% levy on all imports of the industrial metal.

The global steel market is barreling toward a war on multiple fronts as politicians pursue measures to stem imports of the industrial staple. South Korea and Vietnam are raising the barricades, the European Union is tightening safeguards, while mills in Latin America are angling for more protection.

More often than not, the target is China – the dominant producer whose exports surged close to a record last year. The risk for steelmakers around the world is that Trump’s tariffs worsen oversupply, piling pressure on producers and governments at a time when demand for the alloy is struggling.

“If there are barriers into the US then at least some of that steel will be diverted, at least in the short term,” said Tomas Gutierrez, an analyst at consultancy Kallanish Commodities, who has tracked the industry for more than 15 years. “More mills will be looking for other markets.”

The gray metal is a cornerstone of the world economy. Most major nations aspire to have a steel industry, and its entrenched political links have left it prone to bursts of protectionism from the 19th century onward. For Trump and others, it is a symbol of manufacturing might, even today.

Trump’s 25% tariffs on all imports of steel – as well as aluminum – come into force on Wednesday. Though not all details are yet clear, the latest steps bolster trade measures introduced in his first term, removing exemptions for many nations and extending them to new categories of products.

The latest trade barriers are the most extensive since 2015/16, and risk driving up the cost of everything from making cars to building infrastructure, threatening dislocation and job losses in troubled steel-dependent sectors. Whereas previous moves had been targeted, the current round uses blanket measures, affecting larger volumes and key trade routes.

The result, steel producers fear, will be to reroute even more excess supply from China and elsewhere into already pained markets.

That’s what worries European steelmakers. Under the first Trump administration, for every three tons that did not land in the US, two arrived in Europe, according to Eurofer, the organization representing EU steel producers.

“The 18 million tons, which the US is today importing with exemptions, they will have to find another place. They’re looking for an open market, which is the European Union,” Director-General Axel Eggert told reporters in Brussels last week.

BAD TIMING
A key plank of Trump’s case for tariffs is China. He argues that Beijing’s steel is flooding other countries, in turn spurring them to ship more to the US, Brazil, Mexico and Argentina have been cited as culprits. The president has also blamed other nations for not doing enough to address China’s bloated steel sector.

That industry does overshadow most of the world. It expanded aggressively over the first two decades of this century to help build the nation’s cities and manufacturing might. But while demand has faded in the past five years, in part a consequence of the pandemic and the nation’s property crisis, annual output has remained stubbornly above one-billion tons – pushing exports higher.

That export surge has already triggered a wave of pushback from trade partners – who now fear they will have to bolster protection still further.

Vietnam and South Korea, the two biggest buyers of Chinese steel and themselves major exporters, have put duties on hot-rolled coil, a widely used product that features heavily in global flows. Taiwan has also launched an anti-dumping probe. And India’s trade authority has recommended broad tariffs on steel imports, according to a local report.

“Producers of Thai steel products will face much tougher challenges. We are already enduring a difficult period with the influx of Chinese steel products even with some anti-dumping measures by the government to protect local producers,” said Petrung Maesincee, president of Thailand’s Metal Tube and Cold-Forming Steel Association.

“Another concern is the tariffs on other countries’ steel products may also prompt countries other than China to offload their products into Thailand. We see a visible increase in steel products from Vietnam.”

The EU, meanwhile, is reviewing its import controls after increased flows from unusual destinations coincided with a slump in European demand.

Shanghai Metals Market, a Chinese researcher, estimates that the total volume of Chinese steel caught up in anti-dumping cases stood at more than 30-million tons by the end of February – over a quarter of last year’s exports.

China has weathered export squeezes before, by switching to different steel products or finding new destinations, said Kallanish’s Gutierrez. If it can’t do so this time, it would deal a heavy blow to the domestic industry. The risk is that “things become so restricted that it reaches a kind of tipping point,” he said.

More than 30 new anti-dumping cases were recorded in 2024, according to the China Metallurgical Industry Planning and Research Institute, a government-linked body, which warned of worsening conditions for exports.

Commodities consultancy CRU Group expects Chinese steel exports to fall by as much as 17% this year, partly because of the global pushback.

All of this is adding to pressure on China’s steel industry to rein in excess production. At the government’s annual legislative meetings in Beijing last week, policymakers pledged to trim overcapacity in steel and other industrial sectors, roughly a decade after their last big push on so-called supply-side reform.

There is less state stimulus support this time, but the economy has also matured to become less steel intensive in the interim. China could see the reckoning for the industry that Trump and his supporters may feel is long overdue.