Steel buyers' uncertainty spikes ahead of April tariff announcements 

Brazil, India, Turkey and Vietnam could be most affected by reciprocal import tariffs set to be introduced by the United States from April 2, according to MEPS analysis.  

MEPS’s US hot rolled coil prices have increased by 35.6% in three months. However, uncertainty caused by the imminent application of further tariffs is slowing steel procurement. US steel buyers are increasingly adopting a “wait and see” stance as confusion undermines their forward planning.  

• This article was first published in MEPS's International Steel Review. The monthly report provides subscribers with steel prices, indices, market commentary and forecasts from key global steel markets. Contact MEPS for details of how to subscribe.

Following the blanket application of 25% Section 232 tariffs on March 12, reciprocal tariffs are causing fresh concern. These will be applied to all countries where tariffs on US-origin goods exceed those applied by the US to imports from that country. All tariffs will be cumulative. Consequently, the cost of the existing Section 232 and 301 tariffs will be added to that of any other antidumping or countervailing duties.  

Growing tariff uncertainty  

The implementation of reciprocal tariffs is expected to coincide with that of 25% tariffs on all goods from Canada and Mexico, which were previously paused by President Trump. The preliminary ruling of the Department of Commerce and the US International Trade Commission’s antidumping investigation into corrosion resistant flat rolled steel (CORE) imports from 10 countries, including Canada and Mexico, is also expected in April.  

New barriers to international trade are harming the US economic outlook. On March 19, US Federal Reserve (Fed) chair Jerome Powell described economic uncertainty in the US as “remarkably high”. His comments came as the Fed held interest rates – maintaining the key borrowing rate at 4.25-4.5% – and cut its 2025 GDP growth forecast from 2.1% to 1.7%.  

Details on April 2’s reciprocal tariffs announcement have been in short supply. However, Treasury Secretary Scott Bessent recently gave insight into how rates would be calculated. An estimate of non-tariff barriers, such as currency manipulation and taxes, would be considered alongside the tariff that the country applied to US exports, he suggested. The resulting tariff rate would be used as the basis of trade negotiations with each country, he said.    

Following analysis of tariffs and taxes applied to US exports by its top 20 steel trading partners (excluding China), MEPS places India, Brazil and Turkey at most risk from high tariffs. Because of an average VAT rate of almost 20%, European countries are estimated in the middle reciprocal tariff range. Vietnam is also exposed due to its 10% VAT rate, high average tariffs and its large trade surplus with the US. Other countries, such as South Korea, Taiwan, UAE, Japan and Australia are on the lower range of potential reciprocal tariffs.   

EU sharpens its ‘trade defence instruments’  

As exports to the US become increasingly challenging, the European Commission this month announced a series of measures to protect its domestic industry from the threat of redirected exports of low-cost steel. On March 11, a draft document submitted to the WTO revealed proposed changes to its import safeguard measures*, which will come into force on April 1.   

The Commission has proposed the reversal of the redistribution of Russia and Belarus tariff-rate quota volumes. This would reduce the duty-free hot rolled coil quota by around 12%, to 1.9 million tonnes per quarter. Furthermore, caps would be applied to individual countries’ use of the quarterly “other countries” quotas for various steel products, ranging from 13-30%. The hot rolled coil quota cap would be cut from 15% to 13%.  

On March 19, the Commission then revealed, in its Steel and Metals Action Plan, that its focus on “sharpening the existing Trade Defence Instruments” would extend to a new “melt and pour” rule for steel imports. The measure would identify an import’s country of origin in order to tackle the avoidance of countervailing duties.  

Steel buyers seeking clarity across the regions covered by the International Steel Review may receive some answers in the coming weeks. Nonetheless, uncertainty is likely to subdue market confidence throughout 2025.  

*These proposals were later adopted by the European Commission, with the approved revisions to the EU safeguard measures published on March 25.