US Ends Steel Import Exemptions, Impacting Global Trade Flows: ICRA
The United States has withdrawn all country-specific duty exemptions on steel imports under Section 232 of the Trade and Expansion Act of 1962. Effective March 12, 2025, all steel imports will be subject to a uniform 25% tariff, removing preferential access for countries like Canada, Brazil, the EU, Mexico, South Korea, Japan, and others. These exemptions previously accounted for 75-80% of US steel imports.
Girishkumar Kadam, Senior VP & Group Head, Corporate Sector Ratings, ICRA, noted that the move will impact 6-7% of global steel trade flows. With the US relying on imports for nearly a quarter of its finished steel demand, domestic substitution will take years, pushing US steel prices higher in the near term.
For India, the change presents mixed effects. Around 4 million tonnes per annum of steel from Japan and South Korea, which previously had preferential access to the US, could be diverted to India, increasing import pressure. With both countries already among India’s top three steel suppliers, this shift—enabled by duty-free access under FTAs—could weigh on domestic steel prices and industry earnings in FY26. However, China’s steel exports to the US are already subject to a 25% tariff, making its redirection to India a lesser concern.
Commenting on the industry trends, Kadam added, “While higher imports from Japan and South Korea remain a key downside risk, we believe that there are possible upsides as well for the domestic industry. The ending of the USA’s preferential market access regime and bringing in a level playing field can potentially lead to displacement of high-cost suppliers like Canada, Brazil, EU, and Mexico, with low-cost suppliers, especially from Asia. As per our estimates, around 19 mtpa of steel cargoes enter USA from these high-cost countries. This opens the possibility for Indian mills to nibble at a part of this large opportunity and increase their export footprint in USA, which, as of now, accounted for a miniscule 2-3% of India’s overall steel export basket.”
