Steel sector of Ukraine is hardest hit by the US trade restrictions

Ukraine is one of the most affected countries by trade regionalization. There are 33 trade restriction measures in force against steel products from Ukraine in 11 countries and economic blocs.

To support Ukraine in overcoming the negative consequences of the war, 6 restrictive measures were temporarily suspended, incl. safeguard tariff quotas in the EU. It was extremely important given the limited logistics capabilities from Ukraine. Ukraine was also exempted from Section 232 in the United States, but this exemption expires in mid-2024.

At the same time, 7 anti-dumping measures against steel products from Ukraine are still in force in the USA. In other words, every fourth measure restricting trade in steel from Ukraine was introduced in the USA. These measures cover all product groups and block the export of finished steel products from Ukraine to the United States.

The US introduced the most painful measures for Ukrainian steelmakers among currently acting measures, which led to annual losses in exports from Ukraine by more than 800 thousand tons. Even 5 measures introduced by the Eurasian Economic Union, under the leadership of Russia, led to fewer losses.

In particular, among the introduced measures in the US are anti-dumping duties on rebar (41.69%), wire rod (34.98% – 44.03%), pipes for oil & gas (23.75%), HR coils (90.33%), HR sheets (81.4% – 237.9%). The size of the duties makes these measures prohibitive.

Of the 7 measures introduced by the United States, 4 were presented before 2004, when steel exports from Ukraine amounted to more than 28 million tons. It is incomparable with export volumes in 2023 – 3.3 million tons. In other words, the new reality of Ukraine doesn`t imply pressure on export markets.

The extension of Ukraine’s exclusion from the EU’s safeguard measures, as well as the review of US trade policy towards Ukraine, will be beneficial for all stakeholders. Easing trade restrictions will allow Ukrainian businesses to improve budget financing and reduce the need for external financing.