Chinese Steelmakers Circumvent Tariffs by Exporting Semi-Finished Products

How Chinese Steelmakers Use Semi-Finished Products to Avoid Tariffs

Chinese steelmakers increasingly export semi-finished steel billets to markets like Indonesia, Turkey, and Saudi Arabia. These products face lower tariffs than finished rolled steel, allowing Chinese producers to circumvent trade barriers. This shift undermines international efforts to curb cheap steel imports and has sparked protectionist responses globally. Customs data shows China’s billet exports surged over threefold in early 2025, reaching 1.37 million tons.

Meanwhile, Southeast Asian countries often import Chinese billets, process them, and re-export finished steel to Europe and the US. This transshipment further complicates trade enforcement. Industry experts warn that such tactics flood markets with low value-added products, hurting local producers and distorting competition.

Implications of Chinese Steel Export Strategies on Global Markets

The China Iron and Steel Association (CISA) has urged Beijing to impose export duties on billets to prioritize higher value-added steel exports. This move aims to improve industry sustainability and reduce reliance on dumping low-cost semi-finished products abroad. Since 2024, more than 38 anti-dumping investigations target Chinese steel, with key trading partners like South Korea and Vietnam imposing tariffs.

Despite trade restrictions, Chinese steel exports grew 9.2% in the first half of 2025, totaling 58.15 million tons. This persistent expansion challenges global steel markets and calls for coordinated policy responses to balance fair trade and industry growth.

SuperMetalPrice Commentary:

Chinese steelmakers’ strategy to sidestep tariffs via semi-finished product exports highlights the complex dynamics of global steel trade. While this approach sustains export volumes, it raises questions about long-term industry health and fair competition. Policymakers worldwide must enhance monitoring and harmonize trade rules to counteract transshipment and tariff avoidance. Simultaneously, encouraging China to focus on high value-added steel production can foster more balanced trade relations and stable markets.