Direct Export Blockage: The U.S. is one of the world’s major steel importers. In 2024, the U.S. imported 31.82 million tons of steel (including billets), with major suppliers including Canada, Brazil, the EU, South Korea, and Mexico.

However, only 890,000 tons were directly imported from China, accounting for just 0.8% of China’s total steel exports and 2.8% of U.S. steel imports. Although this round of U.S. "reciprocal tariffs" excludes steel, aluminum, gold, and copper from the tariff list, the U.S. had already imposed a 25% tariff on imported steel under Section 232, effective from March 12.

Following Trump’s announcement on February 10 to impose a 25% tariff on steel imports, countries like Vietnam and South Korea have initiated anti-dumping measures against China’s steel exports.

This will inevitably impact China’s steel exports. It is conservatively estimated that China’s steel exports this year could decrease by 15 million to 19.5 million tons.

Indirect Export Impact: About 60% of China’s foreign trade exports consist of electromechanical products, which significantly boost China’s indirect steel exports. According to SteelHome’s website, China’s indirect steel exports last year were approximately 150 million tons.

The U.S. is China’s second-largest export destination, with an export value of 3.7 trillion yuan in 2024, accounting for 14.7% of China’s total exports. Over 50% of these exports are related to steel, with mechanical and electronic products alone accounting for 1.55 trillion yuan, or 41.5% of exports to the U.S.

The tariff increases by the U.S. could also encourage other countries to adopt protectionist policies, which may significantly affect net export countries.

Increased Pressure from Supply Surplus: The supply-demand imbalance is a long-standing issue for China’s steel industry. According to SteelHome’s website, the current production capacity of major steel products in China exceeds output.

Any reduction in direct or indirect exports will increase pressure from supply exceeding demand. Currently, the real estate sector in China is still in deep adjustment, and traditional infrastructure investment growth is sluggish.

Emerging industries like equipment manufacturing and new energy offer limited support for steel demand. Coupled with obstacles in electromechanical product exports, the impact on steel consumption, especially flat steel, is significant. In recent years, China’s steel consumption has shown structural changes, with a continuous decline in demand for construction steel and an increase in industrial materials. The product structure adjustment of China’s steel enterprises is shifting from general to high-quality specialty products and from long products to flat products, with particularly increasing production capacity for flat steel. It is likely that both demand for construction steel and industrial materials will decrease this year.

Conclusion: The U.S. "reciprocal tariff" increase represents a systemic risk, and its full impact on the global economy is difficult to assess.

In the short term, heightened market risk sentiment could lead to a sharp decline in capital markets and commodity prices, which will inevitably affect steel spot prices, although this impact may not last long.

 In the medium to long term, the global tariff war will further increase pressure on China’s steel industry from supply exceeding demand. A downward shift in steel prices is highly probable, and steel enterprises must be prepared to face even greater challenges.