The American Iron and Steel Institute (AISI) has called for stronger trade action to address global steel overcapacity, warning that the issue continues to threaten the viability of domestic industries and manufacturing jobs in the US.
In its submission to the Office of the United States Trade Representative under Section 301 investigations, AISI highlighted that global excess steel capacity reached approximately 640 million mt in 2025 and is expected to continue increasing in the coming years. Despite declining global demand, production capacity continues to expand, driven largely by government subsidies and non-market policies.
Rising exports and trade distortions intensify pressure
According to AISI, excess capacity leads to increased exports from overproducing countries, displacing domestic production in other markets, including the US.
The association noted that countries facing import pressure often respond by increasing their own exports, creating a cycle that further destabilizes global markets.
China remains central to overcapacity issue
AISI emphasized that China remains the largest contributor to global overcapacity, accounting for a significant share of excess production and exports.
China’s steel exports reached around 131 million mt in 2025, while its share of global excess capacity rose to over 50 percent, supported by extensive government subsidies and overseas investments.
Circumvention and indirect trade gaining importance
The report also highlighted increasing use of circumvention strategies, including:
- Routing exports through third countries,
- Modifying products slightly to avoid tariffs,
- Expanding indirect steel trade via steel-intensive goods.
Indirect steel trade has grown significantly, reaching volumes equivalent to 93 percent of direct steel exports in 2024.
Call for comprehensive policy response
AISI urged US authorities to adopt a multi-faceted approach, including stricter enforcement of existing tariffs and additional measures under Section 301 investigations. The association stressed that addressing excess capacity requires coordinated action targeting subsidies, unfair trade practices and indirect trade flows.
AISI concluded that without decisive action, global overcapacity will continue to undermine investment, reduce capacity utilization and threaten long-term industrial competitiveness in the US steel sector.