US tariffs? China’s steel industry has far bigger problems than that

Chinese steelmakers are facing a major demand challenge – but it has little to do with the new 25 per cent tariffs announced by US President Donald Trump.

In reality, Washington’s latest trade move will barely affect China’s steel industry, as shipments to the US account for only a small fraction of its total exports, analysts said.

However, Chinese steel producers are becoming more dependent on exports to other markets due to sluggish domestic demand and persistent industry overcapacity.

The US gets most of its imported steel from Canada, Brazil, Mexico and South Korea. China, despite being the world’s largest steel producer and exporter, accounted for less than 2 per cent of US steel imports in 2024, according to the American Iron and Steel Institute.

The US tariffs will have little direct impact on China, though some second-order effects may occur, said Xu Tianchen, a senior China economist with the Economist Intelligence Unit.

“US tariffs may lead to steel oversupply in some third countries, and in order to alleviate the pressure facing their own steelmakers they might want to tighten their restrictions on cheap steel imports from China,” he said.

China’s total steel exports rose by 22.7 per cent in 2024 to reach a historic high of 111 million tonnes, with only 0.8 per cent of those shipments going to the US, according to Chinese customs data.

Chinese steel exports to the United States amounted to just 891,700 tonnes in 2024, a 5.5 per cent year-on-year increase.