Iron & Steel Mills NAICS 331110

May 23, 2025 - Tariff Pros and Cons

• While US steel makers are big supporters of President Trump’s tariffs on foreign imported steel, the industry is less enthusiastic about the ways global tariffs will raise their costs. Reporting on Vice President JD Vance’s recent visit to a Nucor steel plant, The Wall Street Journal noted Nucor warned about the ways Trump’s global tariffs will increase its costs for both equipment and raw materials, specifically pig iron and direct-reduced iron (DRI) used in steel production. In 2024, pig iron imports totaled 4.7 million metric tons, much of it from Brazil, and DRI imports were 1.5 million tons, almost all from Trinidad, according to S&P Global Commodity Insights. Moreover, tariffs on metals could potentially discourage new construction projects and raise the price of vehicles and appliances, reducing demand for those products and consequently domestically-produced steel.
• The Trump administration's pro-tariff, deregulation agenda is playing well among US steel producers, statements from the American Iron and Steel Institute (AISI) attest. The EPA’s March announcement that it’s reconsidering 31 regulations, including several air emissions rules that impact the US steel industry, was enthusiastically welcomed by steel makers. “AISI strongly supports EPA’s reconsideration of emission limits on integrated facilities, taconite ore processors and coke plants,” said CEO Kevin Dempsey, adding the regulations are onerous, costly, and unnecessary. The industry also strongly supports the 25% tariffs the administration has levied on US steel imports, including the closing of a loophole under Section 232 that allowed foreign producers to avoid tariffs. Tariffs on steel imports imposed by the first Trump administration led to increased production and higher steel prices, albeit temporarily, and the creation of iron and steel manufacturing jobs between 2017 and 2019, another short-term boost.

• China’s output of crude steel fell 1.7% in 2024 compared to 2023 to a five-year low on weak demand from its ailing property sector, Reuters reports. As the global leader in steel production and a big exporter of the metal, China has an outsized impact on the global supply and steel prices. Amid weak domestic demand last year, China's steel exports reached their highest level since 2015, sparking global trade tensions as producers in Japan, India, and elsewhere argued that a flood of cheap Chinese steel products was hurting local manufacturers, according to Reuters. President Trump has threatened to impose tariffs of 10% to 20% on steel imports to the US and 60% on goods from China. The US is a net importer of steel. While China is not a significant supplier of steel to the US, Canada and Mexico combined account for about a third of US imports.
• Employment by iron and steel mills was flat in March compared to a year ago, while average wages at primary metals manufacturers, which includes iron and steel mills, rose 3.6% year over year in April to $29.83 per hour, easing from their record high in March, according to the latest US Bureau of Labor Statistics data. Producer prices for steel and iron mills have tumbled 40% from their peak in January 2022, when demand for metal surged amid the post-pandemic rebound in manufacturing. Meanwhile, after-tax profits for iron, steel, and ferroalloys companies sank 73.7% YoY in the fourth quarter and fell 47.9% from Q3, according to Census Bureau data.