Global steel trade shifts as U.S. tariffs trigger protectionist moves

September 22, 2025 (MLN): Countries worldwide are considering stronger trade protection measures in response to the U.S. decision to sharply raise tariffs on steel imports, according to Fitch Ratings.

The heightened uncertainty is weighing on demand expectations, while producers redirect capital spending toward decarbonization and value-added products albeit at a slower pace in some regions.

Washington increased tariffs on all steel imports to a flat 25% in March before doubling the rate to 50% in June, pushing up domestic steel prices.

According to Fitch’s Global Investment-Grade Steel   Peer Credit Analysis, most of these higher costs are being passed through to consumers. The U.S. remains a net importer, with 26.2 million tonnes brought in during 2024, representing 18% of demand.

Source: Fitch Ratings

Mexico and Canada accounted for nearly 40% of the total, though overall imports have fallen as new domestic capacity came online ahead of demand growth.

Trade patterns are expected to shift as higher-cost producers struggle to compete with lower-cost rivals.

This is likely to redirect more expensive steel away from the U.S. toward less-protected markets such as Latin America and Türkiye.

Governments are already responding. The European Union is considering a “melted and poured” rule to tighten origin requirements, alongside fresh anti-dumping and safeguard measures.

Similar moves are under discussion in India, Türkiye and Brazil, where prices have been under pressure since 2023 due to surging Chinese steel inflows.

The European Steel Association recently cut its 2025 consumption outlook, now projecting a 0.2% decline, citing the disruptions caused by U.S. tariffs.

Nonetheless, EU steel prices have been supported by higher infrastructure and defense spending and are set for a further boost from 2026 with the full rollout of the Carbon Border Adjustment Mechanism.

In China, authorities are targeting a gradual 5% reduction in steel output in 2025, part of efforts to curb production. The move is expected to support domestic margins while easing export-driven pressure on global markets. Direct exposure to U.S. tariffs remains negligible, as the U.S. accounts for just 1% of China’s steel exports.

U.S. producers including Nucor and Steel Dynamics are expanding both their value-added portfolios and production capacity through new mills and acquisitions, positioning themselves to capture a larger share of the reduced import market.

Industry leaders such as Nucor, Steel Dynamics, Gerdau and Vallourec maintain low leverage, Fitch noted. U.S. producers in particular have benefited from historically high prices and record earnings since 2021, leaving them well-placed to fund growth initiatives and return capital to shareholders.

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