One of President Donald Trump’s most impactful moves during his first term was applying 25% tariffs on nearly all steel imports. As a result, the American steel industry saw a revival.
On March 12th, he reinvigorated that action by closing the exemptions and loopholes that had weakened it over time. He was right to do so.
A suffering industry
The American steel industry was cutting production, laying off workers, and idling facilities because of unfair trade. Domestic steel producers filed a series of trade cases seeking relief from unfairly traded imports.
Countries selling this dumped or subsidized steel in our market included China, Korea, Taiwan, Australia, Brazil, Mexico, Canada, India, Vietnam, Germany, the Netherlands, Russia, Japan, Belgium, and France.
Domestic producers must file these cases to compete successfully, but they have become a costly game of Whac-a-Mole. One successful trade case is soon followed by import surges of new products or products from new countries.
The president’s comprehensive response leveled the playing field. The industry’s production and percentage of what could be produced (what’s called its capacity utilization) improved as harmful import volumes fell. Steel companies invested more than $20 billion to expand and improve their capabilities.
Most importantly, they were able to continue providing reliable, high-wage jobs to the hard-working Americans and the communities that rely on them. And the American economy continued to thrive.
Weakened tariffs
Over time, however, the impact of the tariffs was dramatically weakened. Negotiations and agreements led to complete exemptions for Australia, Canada, and Mexico, and partial exemptions in the form of tariff-rate quotas for Japan, the European Union, and the United Kingdom.
They led to quotas for Argentina, Brazil, and Korea that are no longer effective given changing market conditions. The new agreements allowed millions of tons’ worth of product exclusions, including for products that domestic producers are ready, willing and able to supply.
As a result of these modifications, the tariffs have applied to only a small share of total U.S. steel imports for the last several years. Their beneficial impact on the American industry has been significantly eroded.
Today, market conditions are once again deteriorating. The intergovernmental Organisation for Economic Co-operation and Development projects that global overcapacity will reach 644 million metric tons by 2025, an increase of nearly 100 million metric tons over 2023.
China’s steel exports in 2024 reached near-record highs of more than 110 million metric tons, as its domestic demand has collapsed. Prices around the world are falling.
This has driven higher U.S. imports from the countries that were exempted from the steel tariffs, even as U.S. demand has softened. U.S. finished steel imports were more than 630,000 metric tons higher in 2024 than in 2023, with Canada, Mexico, South Korea, and Brazil — all exempt from the tariffs — the four largest sources.
The domestic industry’s shipments, in contrast, declined by 3.6%. The American steel industry’s capacity utilization rate has fallen to 75%, well below the 80% minimum target set by the Commerce Department in 2018, and nearly three percentage points lower than it was this time a year ago.
A stable supply
The American steel industry, in other words, is going in reverse, primarily because of increasing imports from exempt countries and product exclusions. With global overcapacity soaring, foreign producers everywhere will take advantage of any gaps in America’s tariffs to find an outlet for their excess steel in the U.S. market.
The harmful impact of a ton of imported steel sold at the domestic industry’s expense does not depend on whether it comes from an “ally” or “adversary” country.
A stable supply of domestically produced steel is more important than ever to America’s national, economic and energy security. In the face of the considerable pressure likely to come to exempt certain countries and weaken the tariffs, the president has stayed strong and continued to put America first on steel trade.
Philip K. Bell is the president of the Steel Manufacturers Association.
First Published: March 18, 2025, 8:30 a.m.
