US steel tariffs may prove import equalizer

The removal of steel import quotas and nontariffed systems by the US, even as President Donald Trump reimposes steel tariffs, may help level the international playing field, allowing countries that have been unable to compete for years in the US steel market a chance to sell steel into the country.

Buying interest for steel imported to the US from countries that have not been able to be competitive for years has grown in recent weeks. US buyers told Argus that skyrocketing US prices — combined with the reimposition of 25pc Section 232 steel tariffs on countries with tariff rate quotas (TRQs) and non-tariffed steel — has reopened some markets.

The 25pc 232 tariffs have been in effect since March 2018, but many countries have received exemptions and TRQs, with 80pc of US steel imports coming from these excluded countries and not incurring the 25pc tax, according to US Department of Commerce data.

The equalizing of the trade barrier to cover all imports could allow countries like Turkey — which used to be a major source of imported steel into the US — to restart some trade flows to the country, as global prices remain at a wide discount to US prices.

Domestic buyers want imports

US service centers interested in diversifying their purchases with lower-priced foreign steel and importers interested in selling the material said wide deltas between US steel prices and imports made imported offers from at least a half dozen countries more attractive over the last few weeks.

The Argus US hot-rolled coil (HRC) Midwest and southern assessments both rose week on week by $15/short ton (st) to $935/st on 11 March, while the HRC import assessment jumped by $80/st to $800/st DDP Houston, Texas. The wide spread between domestic and import prices serves as motivation for US buyers to purchase imported steel.

Tens of thousands of tons of cold-rolled coil (CRC) and HRC from Turkey may begin to flow into the US, according to some buyers.

Prior to the original imposition of the 25pc 232 tariffs, Turkey exported 1.98mn metric tonnes (t) of steel products to the US in 2017. Since tariffs were implemented volumes have plummeted, reaching only 391,400t in 2024, according to the Commerce Department.

Other buyers have recently reported purchasing South Korean HRC imports, after that country's mills spent months considering pricing as they awaited clarity on whether the country — which used to have TRQs — would be granted exemptions by Trump. So far Trump has not granted any country exemptions from the reinstated 232 tariffs.

Tons from Turkey and South Korea are expected by mid-year.

HRC import bids were also heard from mills in Australia, Brazil, Egypt, and Vietnam — countries that had not been active into the US for HRC in many months.

Trade policies concerns abound

A concern for US steel importers is that Trump could rapidly change his trade policies and add new tariffs to imports, increasing the duty costs when steel arrives. Such risks have reared their heads over the last two weeks with back-and-forth tariff spats between the US, Canada and Mexico.

To mitigate the risk, most buyers have booked less than they otherwise would, though many believe there will be a rise in some import volumes come mid-2025.

Steel imports from countries without tariffs or with TRQs made up 80pc of the 26.2mn t (28.9mn st) of total steel products imported in 2024. In 2017, the year before tariffs were imposed, approximately 70pc of total steel imports came from those countries, according to US Department of Commerce data.

With this latest round of 232 tariffs, Trump appears less likely to negotiate new TRQs or exemptions, with the tariff exclusion mechanism that allowed companies to file to have specific products not taxed no longer active.

Countries like Australia and Japan were reportedly denied new exemptions in recent negotiations, even as both countries had nontariffed mechanisms in place under the prior scheme.

Domestic companies, particularly steelmakers, can and have filed to have tariffs placed on steel derivative products, which opens up a whole new class of products to the risk of having 25pc tariffs placed on them as Trump attempts to bring manufacturing back to the US.

By Rye Druzchetta