Canada and Mexico are the first and third largest steel exporters to the United States, respectively, and these two countries have been the focus of President Donald Trump's trade policy since the beginning of his second term.
On the evening of January 20, he announced plans to impose a 25% tariff on all U.S. imports from Mexico and Canada starting on February 4. However, at the last minute, these tariffs were postponed for a month due to border concessions from both countries. Meanwhile, a 10% tariff on Chinese goods was introduced on February 4.
Now the threat of 25% tariffs has been implemented, along with an additional 10% tariff on all imports from China. This move caused an immediate reaction on the US stock exchange. Yesterday (March 3), the S&P 500 stock index closed 1.8% lower after its worst session of the year. The impact on steel prices and the supply chain in the region will also be noticeable.
Some Canadian products will affect shipments
According to the American Iron and Steel Institute, imports account for 23% of finished steel consumption in the United States. Imports from Canada and Mexico accounted for 8.6% of U.S. consumption in 2024, while imports from Canada accounted for 6.3%.
Canada is the largest exporter of steel to the United States, having shipped almost six million tons in 2024, representing 23% of total U.S. steel imports. The main imported steel products include sheets, plates and wire rod. Canada exported 927,000 tons of hot-dip galvanized sheet and 550,000 tons of cold-rolled sheet, representing 34% and 38% of total U.S. steel imports for these products, respectively, according to the U.S. Department of Commerce.
However, the import of hot-rolled sheets, plates, and wire rod from Canada is of great concern. Last year, the United States imported 910,000 tons of hot-rolled sheets and 604,000 tons of continuously rolled plates (plates in rolls) from Canada, accounting for 48% and 60% of total U.S. steel imports in these categories. The recent addition of domestic sheet and plate production capacity will help mitigate some of the supply shock to U.S. steel buyers, but disruptions are expected in the short term.
More than 450,000 tons of wire rod were imported from Canada in 2024, accounting for 46% of total U.S. wire rod imports. These imports have become even more important for domestic supplies after the suspension of Liberty Steel wire rod production in South Carolina and Illinois in 2024. According to worldsteel, 2.4 million tons of wire rod were produced in the United States in 2023, but this figure has since decreased significantly due to the closure of these plants.
Steel prices have already jumped
Since the beginning of the year, American prices for hot-rolled coils, plates and wire rod have experienced the biggest movement. Nucor has raised prices for sheets by $260 per short ton, hot-rolled coils by $110 and wire rod by $100 since mid-January. In February
