Do steel and aluminum tariffs really have no impact on China, a major exporting country?

Less than a week later, Trump announced a 25% tariff on all imported steel and aluminum.

This brings us to the second myth about the trade war: Aren't the steel and aluminum tariffs targeted at China, a major steel producer?

If we look at the accounts, the hardest hit are Canada and Mexico, accounting for 22% and 12% of total US steel imports, respectively, and both are major aluminum suppliers. Brazil, with a share somewhere in between, accounts for a significant portion.

Freeland then lamented that the "25% steel and aluminum tariffs are like a dagger aimed at NAFTA partners."

China, the world's largest steel and aluminum producer, appears to have suffered little. After the trade wars of Trump's first term, Chinese steel and aluminum exports to the US have been reduced to negligible levels.

For the past seven years, China and the US have engaged in a cat-and-mouse game over steel and aluminum trade.

In March 2018, the US imposed global tariffs of 25% and 10% on imported steel and aluminum, respectively, and subsequently exempted Mexico, Canada, Vietnam, the UK, and the EU. It then imposed countervailing duties on China.

Chinese steel and aluminum subsequently entered the US via Vietnam and Mexico. In 2019, Vietnam's steel exports to the US increased by 37%, making it the third-largest source of steel imports for the US. In 2023, Mexico became the largest export destination for Chinese aluminum, and at one point, approximately 30% of Mexican steel exports to the US originated from China.

The Biden administration attempted to curb this practice. In July 2024, the US strictly required that Mexican steel imports must be smelted in North America. In the first month of implementation, Mexican steel exports to the US fell by 18%, with China's share of re-exports shrinking to less than 5%.

However, suppliers continued to circumvent this practice, with alternative transit countries such as Vietnam and Turkey increasing their steel exports to the US by 23% year-on-year.

The US ultimately purchased a significant amount of Chinese steel and aluminum, and incurred the additional re-export costs. Domestic steel prices in the US rose by 42% compared to 2018, increasing auto manufacturing costs by 5%-8%, and weakening the competitiveness of the manufacturing industry.

After taking office, Trump adopted a blanket tariff policy, imposing no exceptions on all steel and aluminum imports to the US, which naturally also affected China.

But there is also a loophole - it will take effect on March 12. After that, the scope and extent of the implementation of tariffs will determine whether the old game of "cat and mouse" will be repeated.