Behind the $5 million new order: the carbon steel market effect of the US-China tariff adjustment

一、China-US tariff adjustment, trade situation has turned around

Since May, the major adjustment of tariff policies between China and the United States has injected new vitality into the trade of carbon steel-related products. This tariff adjustment covers more than 80% of steel deep-processing products, directly leading to a decrease of about 15% in the comprehensive cost of a single order. Taking the industrial enterprises in Tianmushan Town, Lin'an District, Hangzhou City, Zhejiang Province as an example, the order volume of local foreign trade enterprises mainly engaged in the export of carbon steel and stainless steel products has increased by 30% compared with the beginning of the year. The person in charge of the company revealed that the repurchase rate of American customers has increased significantly, and they are currently working hard to ensure the delivery of the additional US$5 million orders by mid-June by increasing shifts and optimizing production processes. Industry insiders analyzed that the reduction of tariff barriers not only eased the cost pressure of enterprises, but also enhanced the price competitiveness of "Made in China" steel products in the international market. It is expected that labor-intensive steel processing enterprises will usher in the export peak season in the second half of the year.

二、Trade frictions continue, and policies from multiple countries are frequently issued.

Although the adjustment of tariffs between China and the United States has released positive signals, trade frictions against carbon steel products around the world are still continuing. On April 24, the Ministry of Strategy and Finance of South Korea issued Announcement No. 2025-15, deciding to impose a four-month temporary anti-dumping duty on hot-rolled carbon steel or alloy steel medium and thick plates originating in China from that day, with a tax rate range of 27.91%-38.02%, until August 23. The products involved are hot-rolled steel plates that have not been cold-rolled with a thickness of not less than 4.75 mm and a width of not less than 600 mm, involving multiple Korean tax numbers. This move stems from the anti-dumping investigation launched by South Korea on such products originating in China on October 4, 2024. On March 4 this year, the Korea Trade Commission made an affirmative preliminary ruling and recommended the imposition of a temporary anti-dumping duty. Affected by this, the Korean market, which accounts for 14.1% of China's medium and thick plate exports in 2024, is likely to see a sharp decline in the export volume of related products in China in the short term. ​

Earlier, on April 22, the Canadian Border Services Agency (CBSA) announced an anti-dumping investigation on carbon steel wire and alloy steel wire originating from 9 countries including China, India and Taiwan. The scope of the investigation covers related products with a diameter not exceeding 24.13 mm, including coated or galvanized categories, but not stainless steel wire and welding wire, involving more than 80 customs codes. According to Canada's Special Import Measures Act, if the dumping is established, the products involved may be subject to anti-dumping duties of up to 200%, and a preliminary ruling will be made within 90 days. Enterprises must submit detailed data within 15 days for review. Canadian domestic complainants Sivaco Wire Group and ArcelorMittal Long Products Canada claimed that products from China and other countries were sold at below normal value, causing substantial damage to Canada's domestic industry. However, Canada's steel industry itself also faces difficulties. Although its capacity utilization rate exceeded 85% in 2024, some high-end products still rely on imports, and the price of carbon steel wire is greatly affected by fluctuations in the global raw material market.

三、Enterprises actively respond, and the industry seeks breakthroughs

Faced with a complex and changing trade environment, Chinese carbon steel enterprises are actively exploring response strategies. On the one hand, some enterprises have increased their investment in technology research and development and moved towards the field of high-end products. For example, some enterprises focus on the research and development of high-strength alloy carbon steel to meet the stringent requirements of high-end manufacturing industries such as automobiles and aerospace for material performance, and avoid fierce price competition in the low-end market by increasing product added value. On the other hand, many enterprises are accelerating the development of emerging markets and deepening production capacity cooperation with countries along the "Belt and Road". By investing in and building factories overseas, localized production can be achieved, effectively reducing the impact of trade barriers. In addition, enterprises also jointly respond to lawsuits through industry associations and other organizations, actively feedback industry demands to the government, strive for favorable policy support, and use the WTO dispute settlement mechanism to safeguard their own rights and interests when necessary. ​

The global carbon steel market is in a critical transition period under the dual effects of trade policies and market demand. In the future, how the market structure will evolve and whether countries can find a balance between trade protection and open cooperation still need to be continuously watched.