In the United States, the Court of Appeals for the Federal Circuit ruled on August 29 that most of the “reciprocal” tariffs Donald Trump announced on April 2 were illegal. The Court said Trump had overstepped his presidential authority when he imposed levies on virtually every country in the world as part of his “Liberation Day” declaration. The reciprocal tariffs are distinct from and were imposed in addition to the sector-specific tariffs – such as those on steel and aluminium – which remain valid. The reciprocal tariffs, as high as 50% for all goods from some countries, will stay in effect until October 14 to give the Trump administration time to appeal the decision to the US Supreme Court. Nevertheless, irrespective of what happens to the reciprocal tariffs, the trade chaos Trump has unleashed on the world is already being felt: most notably in the steel and metals industry. Remember, the aim of the steel tariffs was to increase steelmaking activity in the United States, while not raising costs to consumers.

The tariffs on steel and aluminium – which were increased from 25% to 50% on June 3 – have certainly reduced imports. In the first seven months of this year, steel imports into the US were down 5.2% to 15.29 million metric tonnes, according to data from the International Trade Administration. On a year-on-year basis, imports from Canada fell 22.5%; from Japan 17.7%; from Vietnam 29.4%; from Belgium 27.3%; and from Italy by 24.1%. So, perhaps the shortfall will be made up by local producers. But, at what cost? Despite the “boost” from tariffs, US steel producers struggled in the second quarter of this year. Nucor saw net income drop 6.6% year over year to US$603 million, and Cleveland-Cliffs swung to a $470 million loss, from a $9 million profit a year earlier. Furthermore, the trickle-down effect of tariffs is already being seen in numerous of the steel-hungry industries. General Motors has said it expects tariffs to cost it between $4 and $5 billion by the end of this year. Ford expects a $2 billion hit from the tariffs and Stellantis a $1.7 billion hit by year´s end. The price of products to consumers will inevitably go up. Meanwhile, the earth-moving and mining equipment producer, Caterpillar, has said it expects the net impact from incremental tariffs for 2025 to approach $1.5 billion. Rio Tinto, which operates aluminium smelters in Canada, has incurred $321 million in gross costs associated with US tariffs on its Canadian primary aluminium exports, since mid-year. Alcoa, which exports around 70% of its Canadian production to US customers, incurred $115 million in Q2 tariff costs. As a result, the company redirected 100,000 metric tonnes of Canadian production away from US customers in the quarter to avoid tariffs. This realignment of global trade is a growing trend. Of course, if Trump follows true to form, he will ignore any adverse court rulings against his reciprocal tariffs. Thereafter, any government official who stands on principle and defies any of Trump´s illegal instructions – will simply be fired. It´s known these days as “not being aligned with the President´s agenda”.

In contrast to America´s self-inflicted wounds, news from China is that its biggest listed steelmaker, Baoshan Iron & Steel (known as Baosteel), increased its net profit in the first half of 2025 by 7.4%. In a filing to the Shanghai Stock Exchange, the company said it earned US $682 million in the first half of this year. Baosteel is a subsidiary of the China Baowu Steel Group, the world’s largest steelmaker. The filing said Baosteel produced 23.71 million metric tonnes of iron and 25.73 million metric tonnes of steel from January to June. Profitability among Chinese steel mills has improved this year due to a fall in prices of raw materials. Iron ore fell 14.4% and coking coal slumped 41.1% in the period January to June, Baosteel said. At the company’s first-half results briefing, Baosteel´s chairman, Jixin Zou, said he expects China´s total steel exports to stay above 100 million metric tonnes in 2025. Baosteel´s general manager, Baojun Liu, said the company is targeting the capacity to export 15 million metric tonnes and 20 million metric tonnes of steel in 2026 and 2028 respectively. China’s steel exports have ballooned in the past two years, triggering anti-dumping measures from trade partners who argue that the flood of cheap Chinese steel products has hurt local manufacturers. In July, China’s top leadership pledged to cut steel output between 2025 and 2026 as it tackles overcapacity which has hit prices and fed the worldwide protectionist backlash.

In further overseas news with direct relevance to Australia, the website of Sanjeev Gupta´s family conglomerate, GFG Alliance, declares that it´s a global business which is “Forging A Sustainable Future”. On August 21, London’s High Court ruled that Speciality Steel UK, a key operating subsidiary of GFG Alliance, should enter compulsory liquidation as it was “hopelessly insolvent”, with debts of several hundred million pounds but only £650,000 in its account. The court also heard that, across the tangled web of companies that form GFG Alliance, at least 15 companies in nine countries are in insolvency proceedings. Since the collapse in 2021 of Greensill Capital, the main lender to GFG Alliance, Mr Gupta has been struggling to refinance his business interests. An ongoing investigation since 2021 into GFG by Britain´s Serious Fraud Office has hindered his cause. So too did a 2018 private investigator’s report prepared for bankers at Credit Suisse, the main lender to Greensill Capital. According to Bloomberg, the report said that Gupta and his Liberty Steel Group were “clear participants” in a multibillion-dollar fraud because many purported trades were “simply fake”. The Financial Times has separately reported on documents that showed GFG allegedly sold products to companies who denied ever having done business with the steel group. Gupta emphatically refutes any wrongdoing.

In February, the Whyalla Steelworks were taken out of Mr Gupta´s control and placed into administration. Echoes of this are found in a small operation that Liberty Steel runs in Hartlepool, northern England. In August, HM Revenue and Customs filed a winding-up petition over allegedly unpaid tax (since paid). Accounts for the Hartlepool business were three and a half years late. According to the Guardian newspaper, the last published accounts suggested that, to continue as a going concern, the company was dependent on its Singapore parent, Liberty House Group (LHG). Yet LHG was placed into administration in Singapore in April over unpaid debts to ArcelorMittal. A judgement from that case revealed how Mr Gupta tried to retain control of LHG. He said he would “monetise” another asset, the Tahmoor coalmine in Australia, which would free up $42.5 million. This, he said, could be returned to creditors, including ArcelorMittal and the Greensill creditors – despite Gupta owing 100 times that amount, about $4.2 billion. The Singaporean judge was apparently unimpressed with the suggestion, writing: “Mr Gupta was proposing to raise funds from entities he ultimately owned and controlled to enable the company to discharge its debts entirely by paying one cent in the dollar, while retaining (beneficial) ownership and control of the company and the group”. Instead, the judge said it was unclear whether Gupta could even come up with the 1% return offered. He put the company into administration, noting a “lack of candour” about how it expected to find the money. Such is the current day predicament of the man once called the “saviour of steel”.