US trade talks deadline unlikely to end steel tariff turmoil

Stainless steel importers in the United States do not believe that the August 1 deadline for international trade negotiations will end market uncertainty or ease their supply issues.

Back in May, early trade talks with the United Kingdom resulted in a provisional Section 232 tariff of 25% on steel imports from that country – half the 50% rate announced on June 4. However, it remains uncertain whether this rate will remain in place. Furthermore, few US stainless buyers believe that trade agreements reached with other countries will include a reduced steel tariff. 

• This article first appeared in the July edition of MEPS International's Stainless Steel Review. The publication features market insight, stainless steel prices, indices and forecasts from key markets in Europe, Asia and North America. Visit mepsinternational.com or contact MEPS for details of how to subscribe.

In addition to the framework trade deal agreed with the UK, the White House has announced new trade agreements with the EU, Vietnam, Indonesia, the Philippines and Japan. These stipulate 15%, 20%, 19%, 19% and 15% “reciprocal” tariffs on imported goods, excluding steel and aluminium. Following Japan’s recent negotiations, Japanese Prime Minister Shigeru Ishiba confirmed that the 50% US import tariff on steel would remain in place. The EU’s 50% steel tariff will also remain in place, despite mention of a possible quota-based agreement. 

Moreover, the agreed tariffs – above the 10% base rate applied during trade negotiations – are likely to reduce US imports of various goods, including those from steel-containing products. 

Lasting effects of rising tariffs 

Stainless stockists in the US say that the increased trade barriers and market uncertainty caused by President Trump’s tariffs could have lasting effects. 

MEPS’s research showed that US mills’ recent price increases, which were underpinned by an expectation of price support provided by increased tariffs, have been only partially accepted by buyers. Market participants say that stockists and end-users have stepped back from the market and are in “wait and see” mode. Amid weak demand, few are willing to pay the elevated prices offered by domestic producers. 

Despite the tariffs, and low market demand, many US buyers continue to assess the viability of imports. Buyers are engaged in their own negotiations, with overseas suppliers, to determine how the cost of tariffs might be mitigated. Weak domestic markets, elevated US prices and the EU’s January 1 introduction of emissions-based CBAM taxes, mean that Asian producers remain keen to export to the US. 

US stainless steel stockists will be equally keen to maintain their third-country supply chains, where prices allow it. Data published via the International Trade Administration’s Steel Import Monitoring and Analysis (SIMA) System shows that over 1.01 million tonnes of stainless steel was imported into the US in 2024 – an 8.4% increase on 2023. Meanwhile, worldstainless figures show that domestic stainless steel production rose by 6.9%, to 1.95m tonnes, as global production rose by 7% to 62.6m tonnes. In quarter one of this year, US stainless steel melt shop production rose by 8.6% year-on-year to approximately 553,000 tonnes. 

Prospects for post-tariffs demand recovery 

A flurry of international trade agreements on, or after August 1, could bring a degree of certainty, boosting market sentiment. If this prompts a rise in stainless steel demand, then end-users in the US will require the volume of material traditionally sourced from overseas. 

However, indicators of the health of the US economy are currently mixed. Uncertainty prevails. Last month, the US Federal Reserve reduced its GDP growth forecast for 2025 from 1.7% to 1.4%. Its forecast for 2026 was reduced from 1.8% to 1.6%. 

US Census Bureau data shows that construction spending declined by 2.1% year-on-year in the first five months of this year to USD841.5bn. Meanwhile, new orders for manufactured goods, which have increased in five of the last six months, increased by 8.2% to USD642.0bn in May – albeit following a 3.9% April decrease. 

As cited in the Fed’s June decisions to revise its GDP forecasts and hold interest rates at 4.25-4.5%, tariff-induced inflation could slow any demand recovery or rise in US stainless steel prices, in the months ahead.