Potential Trump tariffs will affect China’s indirect steel exports

China’s steel industry, which is struggling with overcapacity and weak domestic demand, may face a new blow if US President-elect Donald Trump imposes 60 percent or higher tariffs on Chinese industrial goods. This is reported by Reuters.

“Heightened tariffs imposed by the U.S. will exert a more significant influence on manufacturing goods, which are categorised as indirect steel exports,” said Jiang Mengtian, an analyst at Horizon Insights.

Qi Chunyi, an analyst at Galaxy Futures, believes that if this happens, 12.78 million tons of indirect steel exports from China will be at risk.

The United States accounts for less than 1% of China’s direct exports of steel products. However, the country’s steel sector could be heavily impacted by potential tariffs on goods such as containers, vehicles, household appliances, etc.

The value of China’s steel exports, such as ships and floating structures, fell by more than 50% between 2019 and 2022 after Trump imposed tariffs on some products in 2018, during his first term.

As GMK Center reported earlier, China’s steel exports in October 2024 increased by 10.1% month-on-month – to 11.18 million tons, reaching a nine-year high. Compared to October 2023, shipments increased by 40.8%.

In January-October of this year, Chinese producers exported 91.89 million tons of steel (+23.3% y/y), which already exceeds the total exports of 2023 and is the highest since 2016. Thus, this year’s figure may exceed 110 million tons.