Beyond tariffs: Why trade attorney Lewis Leibowitz feels global overcapacity remains steel industry’s biggest hurdle

Since early 2025, the US domestic steel industry has undergone significant shifts, driven largely by uncertainty surrounding the expansion of Section 232 tariffs.

In March, the Trump administration declared that tariffs would apply to derivative products made from steel and aluminium.

By May, duties on steel and aluminium had doubled from 25% to 50%, effective June 4.

Then, in August, the administration unveiled the addition of 407 Harmonized Tariff Schedule (HTS) subheadings as derivative products — an eclectic list that even listed beer as being an aluminium derivative, even if it’s imported in bottles.

These rapid changes have left producers and consumers alike questioning what comes next.

In December, Fastmarkets asked Washington-based trade attorney Lewis Leibowitz what might be on the horizon for the upcoming year.

“I would say there may be some changes to [Section] 232. There are several countries, [including] the EU, the UK, [South] Korea and Japan, that are vitally interested in reducing their exposure to 232 tariffs. And there is a lot of wiggle room for the administration to do that,” Leibowitz said. “I also don’t see a lot of benefit to the steel industry from raising the tariffs from 25%, which they were at the beginning of the year, to 50% [in June]. It has not really improved the health and the profitability of the steel industry. Why not? Because low tariffs weren’t the problem. There are other problems.”

Leibowitz pointed to the inadequacy of tariffs when faced with overcapacity worldwide, especially from China.

“And certainly, the tariffs have not succeeded in addressing the problem of global overcapacity, which is principally [coming out of] China. China makes more than half of the steel that is produced in the entire world, and they still do that,” he said.

“China has built an enormous steel industry, and they’re not just using it to export, but to build buildings in China. Now there are 40 million empty apartments in China that nobody owns. But they have the steel production capacity. And governors of provinces in China are just like governors in the United States. If they have a steel mill in their state, they’ll do anything to keep it. It’s politically important. They’re not interested in shutting down capacity, so how can we get them interested in that?” Leibowitz said. “The answer is elusive.”

Need to know more about the steel industry? Download a sample of the Fastmarkets steelmaking short-term forecast.