The Coalition for a Prosperous America (CPA), which represents domestic producers and workers across many industries and sectors of the US, has released a new report reaffirming that Section 232 steel tariffs remain vital for US national security, industrial resilience and defense supply chains, as global steel overcapacity continues to surge.
The report credits the Trump administration’s 2018 tariffs, and their 2025 expansion to 50 percent including downstream products, for reviving the domestic steel industry, boosting investment and protecting strategic sectors without fueling inflation.
Stronger domestic capacity and industrial revival
According to the CPA, the 2018 tariffs sparked a wave of investment across the US steel industry, leading to 21 million mt of new or expanded production capacity, sustained employment growth in steelmaking and supply industries, and capacity utilization above 80 percent, the first time in over a decade.
Steel remains foundational to US national defense, providing critical inputs for tanks, submarines, armored vehicles, pipelines and energy infrastructure.
Tariff effectiveness undermined by loopholes
Between 2019 and 2024, however, tariff effectiveness weakened due to widespread exemptions, tariff-rate quotas (TRQs) and product exclusions. As a result, 72 percent of imported steel entered the US duty-free, reducing the average effective tariff rate to just four to five percent. Imports from Canada, Mexico and the EU increased sharply, and US mill utilization again fell below 80 percent, undermining competitiveness.
Global overcapacity threatens US industry
According to the CPA, global steelmaking capacity reached 2.4 billion mt in 2024, with 543 million mt of excess capacity, nearly six times the total US production capacity.
China continues to dominate global supply, accounting for nearly half of output, while India, Vietnam and Indonesia are rapidly adding new capacity, often financed by Chinese state loans.
Without robust trade defense, the CPA warns, the US market risks becoming a dumping ground for foreign oversupply.
No evidence of inflationary impact
Contrary to critics, the CPA report cites US International Trade Commission (USITC) findings showing minimal downstream price effects, only 0.2 percent per year, from the Section 232 measures. Inflation remained stable at 1.8 percent prior to the pandemic.
The CPA concludes that foreign subsidies and chronic overcapacity, not domestic trade policy, are the real drivers of global market instability.
CPA’s policy recommendations
The CPA urges a permanent, assertive trade defense framework, recommending:
- maintaining 50 percent tariffs on all steel imports with no exemptions or alternative arrangements,
- applying per-ton tariffs to undervalued and transshipped products like pipe and tube,
- prohibiting product exclusions that undermine deterrence,
- using tariff revenues to fund R&D, workforce training, and infrastructure,
- expanding Section 301 tariffs to cover Chinese-origin steel processed in third countries,
- passing the Leveling the Playing Field 2.0 Act to strengthen Commerce Department enforcement powers,
- and modernizing the USMCA to prevent circumvention and improve regional coordination in North America.
“Tariffs are a national security imperative”
The CPA concludes that retaining and fully enforcing Section 232 tariffs is not only an economic necessity but a national security imperative. Without consistent enforcement, the US risks returning to the pre-2018 era of deindustrialization, marked by low utilization, plant closures and financial instability.