All participants in the global steel industry are anxiously awaiting the July 9 end to the 90-day pause Donald Trump placed on his worldwide `reciprocal´ tariffs. As well as a 25% tariff on steel and aluminium products, plus a 10% tariff on all products from everybody, the US President had used his so-called `Liberation Day´ on April 2 to announce reciprocal tariffs on 180 countries and territories. Most economic analysts argued that Mr Trump´s trade policy was absurd, unworkable and wouldn´t bring the solution he sought to the unfair relations he believed America was having with its trading partners. As it turned out, his proclamation instantly undermined business confidence in the United States, and pushed the world to the brink of a financial crisis. Mr Trump´s presidency has also cast doubts on the US dollar’s status as the world’s safe-haven currency. The US dollar index has slumped almost 11% in the first half of 2025, the steepest drop for that period since Richard Nixon was president 52 years ago.

Unsurprisingly, by April 9, Mr Trump was forced to announce a pause on the reciprocal tariffs. He said imports from all countries except China would attract just a 10% tariff for 90 days, to allow individual trade deals to be negotiated. The 25% tariffs remained in place on steel, aluminium, cars and automotive parts. Later, the US placed a 145% tariff on Chinese imports, to which China retaliated with its own 125% tariff on US imports. By mid-May, the Trump administration announced a 90-day pause in what had become virtually a trade embargo between the world’s two largest economies. The US subsequently and temporarily lowered tariffs on China to 30%, while China reduced its tariffs on the US to 10%. But the chaos was far from over. On June 4, Mr Trump suddenly announced a doubling of the Section 232 steel import tariffs to 50%. At the time of publishing, it remained to be seen which countries had negotiated successfully with the Trump administration and which ones will have the full tariffs re-imposed on July 9.

Many public policy experts have questioned whether there is a coherent plan behind the US President’s trade strategy. Certainly, his erratic negotiations have already affected many parts of the global steel industry. As an example, in mid-June, North American Stainless (NAS), the country’s largest stainless steel producer, made the surprise announcement that prices would rise on all shipments from July 1, 2025. The company said the functional discount for grade 304 cold rolled coils and sheets was to be reduced by eight percentage points. Grade 316 and most other austenitic grades, along with grade 430 cold rolled coil and sheets, would see their functional discount reduced by nine percentage points. These discount cuts equated to base price rises of USD 310 per tonne on grade 304 material, USD 464 per tonne on grade 316 and USD 242 per tonne on grade 430. The announcement increased the company´s grade 304 hot rolled coils and sheet prices by USD 298 per tonne and grade 316 by USD 441 per tonne. Its grade 304 hot rolled plate prices rose by USD 397 per tonne and grade 316 by USD 551 per tonne. Almost two weeks after the NAS announcement, Outokumpu, the second-largest US stainless producer, also announced price increases. These broadly mirrored those of NAS, but were slightly less on key commodity grades, including 304 and 316 cold rolled coil and sheets.

The on-again-off-again merger of Nippon Steel with US Steel finally received Presidential approval on June 13 when the Japanese company agreed to make $11 billion worth of new investments in the ailing American firm by 2028. The partnership is expected to “protect and create” more than 100,000 jobs. Under the deal, US Steel will retain its name and remain a US-incorporated entity with its headquarters remaining in Pittsburgh, Pennsylvania. The majority of US Steel’s board of directors, including its CEO, will be US citizens. US Steel will maintain its capacity to produce and supply steel from its production locations to meet US market demand. Additionally, Nippon Steel will not prevent, prohibit or interfere with US Steel’s ability to pursue trade action under US law. In a curious twist, the deal also gives a “golden share” to the US government. This means the US President must consent before Nippon can engage in a wide variety of business decisions. According to World Steel Association data, Nippon Steel was the world’s fourth largest steelmaker in 2024, producing 43.64 million metric tonnes (Mm/t) of crude steel. US Steel produced 14.18 Mm/t last year. However, planned capacity developments could now grow the two companies’ joint annual output to 86 Mm/t.  

To news elsewhere, with special relevance to the Australian steel industry. In May, China´s exports of semi-finished and finished steel totalled 11.95 Mm/t. This was up 6.3% on April and 20.2% up from a year ago. Market sources say China’s exports are likely to remain strong for the rest of 2025; which means, the influx of cheap imported steel into Australia can be expected to continue. The high level of exports – the second-highest in history – was calculated on data from the National Bureau of Statistics, China Customs and China Iron and Steel Association. Industry observers have said that falling domestic steel demand in China is the most obvious cause of the surge in exports. Calculations by Platts, part of S&P Global Commodity Insights, indicate that Chinese domestic steel apparent consumption in May fell to 75.57 Mm/t, down 12.31% year over year. Over January-May this year, steel apparent consumption decreased 3.9% year over year to 374.81 Mm/t, which is 16.6% lower than in the same period of 2021 when China’s property sector peaked. So, in addition to whatever Donald Trump does and/or irrespective of what he does, the weakness in the Chinese economy will continue to influence steel trade flows and prices in the short term.