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President Trump pledged on Monday to impose a 25% tariff on all U.S. steel and aluminum, which will target U.S. allies, but their hearts will strike amid his long-standing enemy: China.
In January, the top five steel suppliers on the U.S. market were Canada, followed by Brazil, Mexico, South Korea and Germany. Canada also led aluminum exports to the United States, while the United Arab Emirates, Russia and China were also far behind.
China will not directly export large amounts of steel or aluminum to the United States. A series of presidential and commerce rulings have imposed many tariffs on China’s steel. Recently, tariffs on China’s aluminum have also been raised. Just last September, President Joseph R. Biden Jr. raised the current tariffs on many Chinese steel and aluminum products by 25%.
But China dominates the global steel and aluminum industry. Its massive modern mill merges with the rest of the world each year. Most of this is used within the Chinese borders to build everything from high-rises and ships to washing machines and cars.
Recently, however, China’s steel and aluminum exports are increasing as its economy struggles, weakening domestic demand. Many of these low-cost exports have entered U.S. allies such as Canada and Mexico, which in turn exported their own more expensive output to the United States. Other Chinese metal exports have been handed over to developing countries like Vietnam, which now buys a large amount of semi-processed steel from China, completes it, and then re-exports it to Vietnamese steel, re-exporting to buyers around the world.
China’s export growth has upset U.S. producers and trade unions.
“China’s overcapacity is flooding the world market and seriously hurting American producers and workers,” said Michael Wessel, a long-time trade consultant for United Steel Workers.
In a daily briefing on Monday, the Chinese Foreign Ministry had little to do with the planned steel and aluminum tariffs. “Let me emphasize that protectionism is nowhere to be found. There is no winner in the trade and tariff war.
The planned tariff comes a week after President Trump imposed a 10% tariff on all imports imported from China. Last week, China announced that it would impose retaliatory tariffs on natural gas, coal, agricultural machinery and other U.S. products on Monday, which will take effect on Monday.
Nick Tolerico, a senior steel trade official in the Reagan administration, said China’s steel pools were derived from the extraordinary prosperity of steel mill construction and lasted for about 15 years. Germany. Now he is a consultant, advising investment companies and companies that buy large amounts of steel.
Since the 1940s, no country has directed the global steel industry at the scale of today’s China. At that time, the United States became half of global steel, but its share has since dropped to less than 5%.
Over the years, China’s construction industry has used a lot of steel. The architectural boom provides abundant housing for the country’s 1.4 billion people and provides enough empty apartments for another 300 million people.
Overhangs of empty apartments are now driving housing market crashes and construction sudden stalls. Desperate to avoid closures, China’s factories reflect a surge in steel exports to all over the world. Over the past few years, they have accepted the lower and lower prices of steel, which has triggered global price erosion.
The price drop hurt the U.S. steel industry, a politically powerful constituency in major electoral areas. United Steel Plants, based in Pittsburgh, is the core of the industry’s long-term base in Pennsylvania, and it turns out to be the core of the recent presidential election. US Steel is a symbol of the United States’ previous role in steel production and is also located in Pennsylvania.
The rebound in steel trade with China is not limited to the United States. Brazil, Canada, Indonesia and Türkiye have all raised tariffs significantly over the past year.
During his first term, President Trump imposed a 25% supplementary tariff on steel and a 10% tariff on imports of aluminum from around the world. He then exempted tariffs from large steel-producing countries such as South Korea, Australia and Brazil in exchange for a quota of how many tons of steel they would ship to the United States each year. But he left the tariffs in China.
Trade protection measures have helped the U.S. steel industry, which has increased capacity by about one-fifth over the past six years to build modern steel plants. Older, less efficient factories have begun to operate in less than all production.
The U.S. Iron and Steel Institute, a Washington-based industry group, said that by the last week of January, U.S. steel plants accounted for 74.4% of capacity.
Siyi Zhao Contributed to the research.
