President Trump stops the global assault on America’s steel industry
Steel is the backbone of America’s national security, essential for military defense, infrastructure resilience and industrial independence. Yet, in the intricate strategic game of the global steel trade, America’s steel industry finds itself constantly under attack.
It’s not just strategic competitors like China and Russia flooding our markets with cheap steel. Some of America’s closest allies, including Canada, Japan, Mexico and the European Union are gaming the system, exploiting loopholes and strategically offloading their excess capacity and production onto U.S. shores.
This is hardly a new playbook. Foreign nations around the world universally recognize the importance of their steel industries to both jobs and national security. That’s why for decades, these nations have relied on massive state subsidies, intricate market manipulations, and preferential trade agreements to prop up their own industries — often at the expense of American workers and U.S. national security.
President Trump’s 2018 Section 232 tariffs quickly leveled the international playing field, and indeed ushered in a new Golden Age for both the American steel and aluminum industries. But under Joe Biden’s sleepy watch, many foreign nations found creative ways to circumvent the Trump protections, increasing exports even as U.S. demand declined. As a result, America’s steel industry is once more in danger.
At the heart of this gamesmanship is an unmistakable strategy marked by overcapacity coupled with large government subsidies. For example, across the Pacific, Japan’s steel industry has long exceeded domestic demand, leaving producers with little choice but to find external markets.
Decades of overcapacity have turned Japan into a steel export powerhouse, with companies such as Nippon Steel projecting an even greater reliance on overseas sales even as domestic Japanese consumption continues to shrink. The result? Japanese steel shipments to the U.S. have surged, benefiting from preferential agreements that were supposed to restrict such flows.
A similar dynamic plays out in the European Union. With a steel production capacity that dwarfs domestic consumption, the EU has kept its mills running through aggressive government intervention. Lavish subsidies — €1 billion here, €3 billion there — have artificially propped up inefficient producers, allowing them to continue flooding global markets with surplus steel.
Even as the EU has loudly proclaimed its commitment to free and fair trade, it has simultaneously welcomed state-backed investment from China, further distorting the competitive landscape. Under the Biden administration’s tariff rate quota arrangement, European steelmakers pounced, aggressively dumping their exports into the American market.
The United Kingdom has also played its mercantilist part. Despite its smaller industrial footprint, the UK government has taken aggressive measures to sustain its steel sector, pouring billions into subsidies while seeking out foreign investors — including China’s state-backed Jingye Group, which acquired British Steel in 2020. With its mills kept afloat by government intervention, the UK has maintained a steady stream of steel exports to the U.S., benefiting from trade agreements that failed to account for the extent of these state interventions.
South Korea, meanwhile, operates on a different but equally effective playbook. A nation where steel production consistently outstrips domestic needs, Korea has weaponized its industry as an export-driven machine. Korean producers, bolstered by government-controlled financial institutions and artificially low energy prices, send more than 40 percent of their output abroad, with the U.S. as one of their top targets.
After Trump imposed restrictions, South Korea simply waited for Biden and then found ways to circumvent the Trump tariffs, rerouting steel through third-party nations and exploiting regulatory loopholes. In multiple cases, the U.S. Commerce Department has caught Korean producers engaging in outright circumvention of trade laws, yet enforcement under the Biden regime was sluggish at best.
Brazil’s approach has been more direct: Dominate the U.S. market for semi-finished steel. For years, Brazilian producers have taken advantage of their unique position as the primary supplier of raw steel slabs to U.S. manufacturers. While American mills rely on these imports, Brazil has leveraged its near-monopoly to maintain a favorable trade position.
The result? A flood of cheap Brazilian steel undermining U.S. producers, further exacerbating America’s steel trade deficit. And just south of Brazil, Argentina has played a similar, albeit smaller-scale, game — dumping excess steel into the U.S. market while offering little in return.
Throughout all of these various gambits, both Mexico and Canada have played key roles, serving as staging areas for the transshipment of steel products, particularly from China, into the U.S. market at preferential rates. The net result is now a steel industry in dire straits.
To make America’s steel industry great again, Trump’s new Steel Tariffs 2.0 immediately puts an end to all country-specific exemptions even as it expands the reach of the tariffs to many more downstream steel products. These moves are a direct and necessary response to years of exploitation and circumvention under Biden’s watch.
Ultimately, this is more than a battle for jobs — it’s a matter of national security. By removing loopholes and quotas, these new Trump tariffs will prevent foreign producers from leveraging outdated trade deals to their advantage. They incentivize higher U.S. steel capacity utilization by reducing imports. They also end the practice of U.S. allies using government subsidies to dump steel into American markets.
As long as foreign producers maintain their state-supported playbooks, the U.S. steel industry will always require a president who will be vigilant in its protection. That description fits Donald Trump to a tee, and his Steel Tariffs 2.0 represent a necessary step towards ensuring that American steel remains a pillar of industrial strength and a fountainhead of American prosperity.
Peter Navarro is the White House Senior Counselor for Manufacturing and Trade.
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