On February 24, 2026, the US government announced a new round of tariffs on imported steel products, covering six key areas: cast iron, stainless steel, galvanized sheet, cold-rolled coil, electrical steel, and special alloy steel. This move is seen as another major step by the Biden administration to strengthen trade protectionism, following the review of steel tariffs on China in 2024. The announcement immediately sent shockwaves through the global steel industry. The China Iron and Steel Association held an emergency meeting overnight to assess the impact, and major trading partners such as the EU and Southeast Asia also indicated they would take countermeasures. This escalating “steel war” not only reflects new trends in great power competition but will also profoundly reshape the global steel supply chain landscape.
I. Increased Policy: A Dramatic Change in the Industry Ecosystem Under Targeted Targeting
The tariff adjustment plan announced by the U.S. Department of Commerce shows that the tariff rate on cast iron products will increase from the original 25% to 45%, stainless steel plates will be subject to an additional 15% tariff, and the remaining four categories of steel products will generally face tariff increases of 10%-20%. It is worth noting that the new regulations specifically include a “country of origin traceability clause,” requiring imported steel to provide a complete list of raw material purchases, otherwise facing punitive tariffs of up to 300%. This move is interpreted by the industry as a targeted attack on emerging steel-producing countries like China—Chinese steel companies have formed significant competitiveness in scrap steel recycling and technological innovation due to their complete industrial chain advantages.
“This is a typical escalation of trade barriers,” pointed out Fan Tiejun, president of the Metallurgical Industry Planning and Research Institute. “The U.S. is attempting to weaken the cost advantage of Chinese steel companies by raising technological barriers, but the cost will be a decline in the efficiency of the global supply chain.” Data shows that although China’s total steel exports to the U.S. will decrease by 28% year-on-year in 2025, exports of high-end steel plates will increase by 42% against the trend, highlighting structural contradictions.
II. Market Ripples: The Dual Impact of Price Transmission and Industrial Restructuring.
Affected by the imposition of tariffs, the price of hot-rolled coil futures on the London Metal Exchange (LME) surged 6.2%, reaching a near three-month high. The domestic steel market is showing a divergent trend: leading companies such as Baowu Steel Group and Hebei Iron & Steel Group are rapidly adjusting their export strategies based on their overseas bases; while small and medium-sized private steel mills are facing inventory backlog pressures, with some companies in East China planning to reduce production by 15%-20%. Notably, demand for special steel for new energy vehicles is surging, with a leading automaker signing a price-locking agreement with Ansteel to secure 300,000 tons of supply for the year.
Downstream industries, such as machinery manufacturing and home appliances are experiencing a sharp increase in cost pressures. The purchasing director of Midea Group admitted, “The price increase of stainless steel sheets will directly push up the production cost of air conditioners, and the gross profit margin is expected to be compressed by 1.5 percentage points in the second quarter.” This transmission effect is triggering a chain reaction, with the International Monetary Fund (IMF) warning that if trade frictions continue to escalate, the global manufacturing PMI index may fall below the expansion/contraction threshold again in 2026.
III. Geopolitical Game: The Restructuring of the Steel Landscape.
This tariff policy adjustment comes at a critical juncture in the strategic competition between China and the United States. Documents disclosed by the Wall Street Journal show that the White House National Security Council held a special interagency meeting to list steel as a “critical mineral,” attempting to consolidate its technological advantage by controlling upstream resources. Meanwhile, the EU launched the second phase of its “Green Steel Initiative,” planning to invest €40 billion over five years to develop low-carbon smelting technologies; Southeast Asian countries are accelerating the transfer of production capacity, with the second phase of Formosa Ha Tinh’s steel plant in Vietnam scheduled to begin production this year.
In this restructuring of the global steel landscape, Chinese companies have demonstrated strong resilience. By 2025, China’s crude steel production will reach 1.28 billion tons, with exports accounting for 18%, and the product structure continuing to shift towards high-end products. Taking Shougang Jingtang as an example, its independently developed ultra-thin oriented silicon steel has achieved import substitution and successfully entered the supply chain of Tesla’s Shanghai Gigafactory.
IV. Breakthrough Strategies: Technological Innovation and Multilateral Cooperation
Faced with changes in the external environment, China’s steel industry is accelerating three major transformations: first, upgrading to green and intelligent manufacturing, with the proportion of electric arc furnace steel production capacity expected to exceed 25% nationwide by 2026; second, digital transformation, with industrial internet platform coverage reaching 82%; and third, deepening internationalization, with projects along the Belt and Road Initiative contributing over 35% to export growth. Ansteel Group’s integrated steel plant project in Indonesia has creatively adopted a “resources-for-market” model, achieving a localization rate of over 90%.
Industry experts are calling for the establishment of broader international cooperation mechanisms. The China Iron and Steel Association has submitted a complaint to the WTO, accusing the US tariff policy of violating free trade principles. Meanwhile, the New Development Bank of the BRICS countries announced a $5 billion special loan to support the green transformation of the steel industry in developing countries. These efforts may push the global steel governance system towards a more equitable and reasonable direction.
Although short-term pain is inevitable, the industry generally believes that the tariff shock will accelerate industry reshuffling. Companies with core technologies and global layouts will prevail in the competition, while those relying on low-end production capacity will be eliminated. The World Steel Association predicts that by 2030, the top ten global steel companies will account for 55% of the market share, up from the current 42%, with regional industrial clusters replacing traditional national competition.
In this era of uncertainty, only by adhering to innovation-driven development and deepening open cooperation can we seize the initiative in the once-in-a-century transformation of the steel industry. As the chairman of China Baowu Steel Group stated, “Steel is the backbone of industry and a measure of civilization. We must prove through high-quality development that ‘Made in China’ has the ability to make a greater contribution to human progress.”
Reprinted from Steel.com
