In an effort to combat Chinese subsidies of steel production and exports, the US Commerce Department has raised import tariffs by over 500%. At the same time, the International Trade Commission is reported to be considering a complete ban on all Chinese steel imports. 1
Last year, the US steel industry laid off approximately 12,000 workers as the market was flooded with over 100 tons of cold-rolled steel products from China, valued at $270 million. Although the ruling by the Commerce Department is not expected to have an immediate impact, it represents a new paradigm in how the US actively shapes the metals market.
China Reacts to Tariffs
While a flood of cheap Chinese steel has been blamed for putting some overseas producers out of business, China denies its mills have been dumping their products on foreign markets, stressing that local steelmakers are more efficient and enjoy far lower costs than their international counterparts. 2
In response to the new tariffs, China announced it will continue to bolster its metal industry internally, offering land, loans, reduced utilities, and tax rebates to domestic manufacturers. China has repeatedly said it will cut total output by about 10%, but has not announced details.