Chinese steelmakers are using a new way to get around tariffs

Chinese steelmakers are getting around tariffs in countries like Indonesia and Turkey by actively exporting semi-finished products, Reuters reports.

According to industry sources, this tactic undermines barriers against the flow of cheap Chinese metal. It also causes concern in Beijing due to the sharp increase in low value-added exports.

Record volumes of Chinese steel exports have sparked a wave of protectionism around the world. Instead, exporters from that country are turning to supplying steel billets, which are usually subject to lower tariffs. Thomas Gutierrez, head of data at Kallanish Commodities, noted that this trend began last fall. According to him, whenever billet exports are profitable, Chinese manufacturers will supply them.

According to customs data, the agency notes, the top five export destinations for steel billets include Indonesia, the Philippines, Saudi Arabia, Italy, and Turkey. Indonesia, Turkey, and Saudi Arabia have tariffs on some types of rolled products, but not on this product.

The relative absence of trade barriers for steel billets compared to rolled products has contributed to the rapid growth of its exports, Mysteel analysts noted. This demand is partly met through transshipment—Southeast Asian countries import and process Chinese semi-finished products, then re-export the steel to Europe and the US.

In the first five months of this year, China increased its exports of steel billets more than threefold year-on-year to 1.37 million tons.

At the same time, the China Iron and Steel Association (CISA) advises the government to restrict such exports so that the industry can focus on supplying higher value-added products abroad – a corresponding statement was published last month. According to the source, Beijing is considering the possibility of introducing export duties on billets.

Since January last year, various countries have launched 38 anti-dumping investigations against Chinese steel. In particular, Vietnam and South Korea, the PRC’s leading trading partners, have imposed tariffs on certain metal products from China, citing damage to local producers.

As GMK Center reported earlier, Chinese steel enterprises increased steel exports by 9.2% in January-June 2025 compared to the same period in 2024, to 58.15 million tons.