Published by: Zihuan Pan<>, Jessica Long<>, Bella Cheng<>, Carman Chew<>, Jessie Li<>
3 Apr 2025 @ 11:02 UTC

China, along with other major Asian countries, have strongly opposed the United States’ recent imposition of reciprocal tariffs on all trade partners, announced on April 2, leaving market participants in various steel-related sectors to anticipate more uncertainty and turbulence in the near term.
The US has introduced reciprocal tariffs targeting several key Asian nations, with China facing additional rates of 34%. Other Asian markets are also hit hard, including Taiwan at 32%, South Korea at 25%, Japan at 24% and Vietnam at a staggering 46%.
Additionally, India – while not in Asia-Pacific – is also affected, facing a 26% tariff. This sweeping tariff strategy reflects the US’ approach to retaliate against perceived unfair trade practices and will have significant economic repercussions across these countries.
President Trump has characterized these measures as a response to longstanding unfair trade practices, aiming to revitalize US industries such as steel and automotive manufacturing.
In response, China has vowed to take decisive countermeasures to safeguard its rights and interests, warning that the tariffs threaten global trade stability. Many other affected trade partners, including Japan, South Korea and Vietnam have also expressed strong opposition.
Steel “The reciprocal tariffs will reduce steel and automobile exports to the US. However, this does not mean the US will stop importing steel and automobiles from Asia. If there is demand and a price gap, these commodities will still enter the US market,” an industry analyst said. He predicted that Asian exporters and US importers would share the tariff burden to facilitate transactions.
The heavy US tariffs will take a toll on China, which is already struggling with slowing exports and is likely to see escalated downward pressure in the second quarter of this year.
The steeper-than-expected reciprocal tariffs on over 180 countries and territories are estimated to lead to a 1.2% decline in China’s real gross domestic product (GDP) and a 1.6% decline in enterprise profits, according to the latest estimate from CIB Research.
But it looks like there is still room for negotiation about the tariff rates, because US Secretary of the Treasury Scott Bessent reportedly said that the tariffs would be intended to be a ceiling, not a floor, an industry analyst in Shanghai said.
On the other hand, Beijing is expected to step up the scope of its stimulus measures in the second quarter to cushion the impact from Trump’s tariffs, the Shanghai-based analyst added.
Vietnam will also likely be heavily hit by the hefty tariffs from the US, given the world’s largest economy is the biggest export market for the Southeast Asian country, sources told Fastmarkets.
Flows of steel products and steel-containing goods entering the US will be constrained by the tariffs, and have to return to the domestic market, which will weigh on overall steel demand and prices, a Vietnamese trader said.
Steel scrap With yet another round of tariffs, Asian steel mills are bracing for a potential surge in the Japanese yen against the US dollar, which could send Japanese scrap prices higher. Vietnamese buyers, in particular, with their growing reliance on Japanese imports, face heightened exposure, a Vietnamese mill source said.
Adding to inflationary pressure, Tokyo Steel – a major domestic steel scrap buyer in Japan – also raised its scrap buying price in the past week, limiting supply availability for exports.
Fastmarkets’ weekly price assessment for steel scrap, H2, Japan-origin import, cfr Vietnam averaged $326-331 per tonne in March, up $7 per tonne from a monthly average of $319-324 per tonne in February.
Several Vietnamese steelmakers said that they’ve halted scrap procurement due to sufficient inventory at the moment and downstream pressures.
South Korean mill sources were also disinterested in scrap imports, with many also slashing their local scrap buying price by $7 per tonne from April 3 and 4. Hyundai Steel also announced that it will be suspending production at its Incheon rebar plant for the month of April, just two months after temporary suspensions to its cold-rolled steel facility back in February.
Fastmarkets’ monthly price assessment for steel scrap H2, Japan origin import, cfr main port South Korea was ¥44,000-45,000 ($297-304) per tonne on March 7, narrowing from ¥43,500-45,500 per tonne the month before.
Coking coal Coking coal has become a focal point in the ongoing trade tensions between the US and its major trading partners. Market participants suggest that the US’ reciprocal tariffs are likely to affect Asia’s export volume of downstream steel products, leading to weaker demand for upstream raw materials like coking coal from countries such as China, Vietnam, Japan and South Korea.
“Although the export volume from China to the US is limited, countries like Vietnam play a key role as destinations for Chinese steel products, which are often processed and then exported to the US,” an international trader told Fastmarkets. “As a result, Chinese steel exports are still likely to be affected.”
This trend could extend beyond China.
The same trader also pointed out that Japan and South Korea, both major suppliers of vehicles to the US, could see indirect effects. Together, these countries account for about 25-30% of the total US car imports. The reciprocal tariffs might reduce US demand for their products, potentially decreasing the need for raw materials, including coking coal.
Furthermore, with the US imposing significant tariffs on goods from Asia and Europe, many industry sources expect these regions – particularly those facing steep tariff increases – to retaliate by imposing their own tariffs on US products, including coking coal, sources said. This would disrupt the global market for coking coal, reshaping trade flows.
The US is one of the world’s largest producers and exporters of coking coal, with significant volumes of its output shipped to key markets, including China, Japan, and South Korea, as well as Europe.
As of 2024, market estimates the US accounted for around 14-15% of global seaborne coking coal exports, making it a crucial supplier for the steel industry worldwide.
The volume of US coking coal exports to EU and other Asian countries excluding China makes them especially vulnerable to these countermeasures, which could significantly affect trade flows and prices, a trade source said.
Ferro-alloys The tariffs have sent shockwaves through the ferro-alloys industry as well, threatening exports, squeezing profit margins, and forcing producers to shift to alternative markets, sources said.
The US, a major importer of Chinese ferro-alloys including ferro-silicon, ferro-chrome and silico-manganese, has raised tariffs to 34%, up from previous rates of 10-15%, which resulted in declining Sino-US export volumes, according to sources.
China ferro-alloys companies are pivoting to Southeast Asia, the EU and Africa, and some firms are exploring localized production in tariff-exempt countries like Vietnam to bypass restrictions, sources said.
“Chinese ferro-alloy shipments to the US will definitely witness a drop, and with further declines expected under the accelerated Sino-US trade wars, a China-based ferroalloy trader source said. And it is quite obvious China ferro-alloys producers will choose to export to other places including the ‘Belt and Road’ countries to offset the US declining export losses.”
Chinese ferro-alloys now face stiff competition from Malaysia and Russia, which benefit from lower or no US tariffs. China’s ferro-alloy producers are being forced to squeeze already thin profit margins to retain market share, sources said.
“Under the current reciprocal tariffs, China’s ferro-silicon export have barely any competitiveness compared with Russia or Malaysian ferro-silicon, which are around $30-50 per tonne lower, ” a China-based ferro-alloy trader source said.