US President Donald Trump issued an executive order on Monday February 10 restoring the full 25% tariffs that were initially imposed in 2018, under Section 232 of US trade regulations, to apply to imports of steel articles from all countries, in an attempt to stem a surge in imports that he said once again is a threat to national security.
By Robert England
Fastmarkets Metals and Mining
February 11, 2025
The order eliminated exemptions and alternative arrangements for some countries put into place over the intervening years that Trump said have weakened the effectiveness of the tariffs. The order was based on a recommendation from US Secretary of Commerce Howard Lutnick.
Under the order, tariff exclusions currently in place will expire on March 12, 2025.
Trump noted that, while US steel consumption declined in 2024, global steel capacity continued to expand, to an excess capacity of 630 million tonnes per year, according to the Organization for Economic Cooperation and Development.
The president’s order cited an 18% increase in imports from Canada since 2018, and highlighted a surge of exports from China in 2024, reaching 114 million tonnes by November, “displacing production in other countries and forcing them to export greater volumes of steel articles and derivative steel articles to the US.”
“This is a very significant action,” according to Christopher Weld, a trade policy attorney at Wiley Rein in Washington, DC.
“If you look at [Section] 232 as it came out in 2018, it had a really significant effect on industry, in terms of investments that followed, and its implementation resulted in increased capacity and capabilities in the US steel industry,” Weld said.
“Over time,” he added, “the beneficial effect of it [for the US] has been whittled down, chipped away as a result of alternative agreements, such as the tariff rate quotas with the EU, the UK and Japan, as well as the absolute quotas allowed for South Korea, Brazil and Argentina.”
With US consumption having declined significantly since 2018, the quota countries have taken a larger share of the US market, Weld said.
Quota volumes were determined based on import levels from the period 2015 to 2017. “Those were high import years,” Weld said.
Downstream products
The executive order also expanded the scope of the tariffs to cover derivative steel products, and ordered the Secretary of Commerce to set up a process within 90 days to add imported derivative steel articles to be covered by the 25% tariffs.
Domestic producers of derivative steel articles and their trade associations will be able to request tariffs on imports by making the case that the imports have increased to the point they threaten national security or undermine the objectives of the Section 232 tariffs set forth in 2018.
“It’s very significant that the president is expanding duties to cover downstream products such as fabricated structural steel and wire strand,” Timothy Brightbill, a trade attorney at Wiley Rein, said.
“What we’ve seen over and over again, in China and other countries where duties were imposed,” he added, “[is that] they have moved downstream to begin manufacturing, and dumping steel-containing products.”
The expanded scope of Section 232 tariffs could consequently “address the problem and increase US domestic manufacturing of these downstream products,” Brightbill said.
But producers of downstream steel products worried whether the full benefits of the tariffs would be tangible for them.
“It may be upbeat with the four aluminium smelters in the US, or the very few steel mills that will immediately increase their prices by 25%. For them, this ruling will be the ‘toast of the town’,” Doug Watts, chief executive officer at Metalworking Group, said.
“But for the thousands of manufacturers that are downstream from those mills, and who are buying their products, it is decidedly not ‘upbeat.’ We will be faced with increased costs, obsolete pricing to our customers, and possible supply chain issues,” Watts said.
“The end result [could be] that we will be unable to absorb those costs and will do our best to pass them along to our customers, who will in turn pass them along to the US consumer, who will, unfortunately, be left holding the ingot,” he said.
A trade attorney, however, disputed the notion that the tariffs would drive up costs significantly, noting that in 2023 the US International Trade Commission analyzed the effects of Section 232 and Section 301 tariffs on more than $300 billion-worth of US imports and found that they reduced import volumes from China, and stimulated more US production of the tariffed goods “with very minor effects on prices.”
The new executive order did, however, allow for tariff-free imports of downstream products from countries that import US-produced steel to make such products.
But a fabricator in the New England region was not entirely happy with this exception for fabricated structural steel products shipped from nearby Canada. “This actually would be borderline acceptable if they were paying what we pay for steel,” he said, “except they have so many other advantages.”
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