The United States returns 25% duty on Ukrainian steel: who is to blame and what will happen next
Donald Trump’s customs activity does not lose momentum, and his next “addition” in the direction of national protectionism became restoration of the 25% duty on the import of Ukrainian steel. This step will come into effect on March 12, threatening serious consequences for the Ukrainian economy. Frontline regions will be particularly affected, where metallurgy remains a key industry and a source of employment for thousands of people.
Metallurgy there are a key branch of the Ukrainian economy. According to the results of last year, its contribution to the country’s GDP was 6%. The export of metallurgical products accounted for almost 16% of the total volume of exports, and the four largest metallurgical companies paid UAH 32.4 billion in taxes to the budgets of all levels. The industry employs 70,000 people, and including related industries – more than 280,000.
Export of metallurgical products to the USA is 57.9% of the total volume of Ukrainian exports to this country, which is equal to $503.3 million from $869.1 million. Main articles of export – cast iron – 940 thousand tons ($363.4 million); pipes – 92 thousand tons ($112.9 million); bars – 3.3 thousand tons ($15.2 million); wire – 3.9 thousand tons ($4 million) and metal structures – 182 tons ($1.3 million).
The largest metal exporters there are ArcelorMittal Kryvyi Rih and Interpipe. These companies suffered greatly from the war, as did the entire metallurgical industry.
Financial losses for the metallurgical industry and economy of Ukraine
The restoration of the US 25% tariffs on the import of Ukrainian steel products will have a significant negative impact on the Ukrainian metallurgical industry and the economy as a whole.
The refund of 25% duty on Ukrainian steel is not just a trade dispute – it is a blow to the Ukrainian economy that will be felt by enterprises, employees, the budget and even the hryvnia exchange rate.
Metinvest and Interpipe will suffer the biggest losses. First will lose $58 million in foreign exchange revenue, will receive a reduction in steel production by 120,000 tons, ore and steel transshipment losses by 400,000 tons. Impact on railway transportation – minus 200,000 tons of cargo. Tax losses – UAH 1 billion per year.
“Interpipe Niko Tube” plant in Nikopol shortens production by 36%, putting hundreds of jobs at risk.
Ukrainian metallurgists already are working on the diversification of sales markets. According to Yuriy Ryzhenkov, CEO of Metinvest, the company has rebuilt its logistics, selling its products in Ukraine and Eastern Europe. With the restoration of the maritime corridor in August 2023, “Metinvest” increased the capacity of mining and beneficiation plants and metallurgical enterprises.
The hryvnia exchange rate is direct depends from foreign exchange earnings, and steel exports brought billions of dollars to Ukraine. A decrease in the inflow of foreign currency from exports may lead to an additional burden on the exchange rate. Analysts are already warning that a decrease in income may push the hryvnia to fall. A decrease in export revenues means less currency on the market, more pressure on the hryvnia, more chances of devaluation.
Can this be changed?
Pressure on Congress, media campaigns, lobbying are the only possible options. But so far, the Ukrainian government is acting too softly, and Washington does not see any serious reasons for concessions. Ukraine has the opportunity to appeal to the WTO to challenge the US decision. However, such processes can be long and do not guarantee a quick result. In addition, the US can justify its actions with considerations of national security, which makes it difficult to appeal.
Ministry of Economy is trying negotiate with Washington, but without concrete results. Washington gave clearly understand: Trump is returning to protectionism, and Ukrainian steel is no longer an exception.
The main problem here is that the Ukrainian government has no leverage. We have no trade agreement with the US, no arbitration mechanism. We may be promised a review – but there are no guarantees.
What will happen next? Such a development of events is likely. Enterprises that exported to the USA – in particular, “ArcelorMittal Kryvyi Rih” and “Interpipe” – will lose access to the high-margin market. Last year, the US was the second largest consumer of Ukrainian steel, and now this flow is stopping.
The reaction of the United States and the reasoning behind the decision
The USA decided to return customs duties on Ukrainian metallurgical products. Why? The official explanation is simple – “national security and protection of the domestic producer”. But if you dig deeper, everything is actually more complicated.
Ukraine was granted exemption from tariffs as early as 2022 – this was a gesture of support after the full-scale invasion of Russia. But two years later, the Americans seem to have decided that this argument is no longer relevant. The restoration of tariffs in 2025 is not just an economic decision, it is a signal that war is no longer a defining factor in bilateral relations.
The Trump administration returns tariffs under pressure from American steel companies. Trade unions and steel manufacturers demanded the restoration of tariffs last year, referring to “dumping schemes” by the EU and Ukraine.
In this matter, Ukraine is rather a side victim, because in the American media the key competitor for the USA is called the EU and China. Ukrainian metal accounts for only 0.5% of total US imports, and its return to tariffs is rather symbolic.
Main argument Washington – “Ukrainian customs exemption was used by European companies.” In particular, the import of steel from Ukraine to the USA almost did not increase, on the contrary, the share of the EU in the American market increased from 11.2% to 14.8%.
The reaction of US consumers and businesses to the reinstatement of steel tariffs has been mixed. On the one hand, US steel companies may welcome the decision because it reduces import competition and supports domestic production. On the other hand, industries that depend on steel as a raw material, such as automotive and construction, may face rising costs.
In addition, there is a risk that other countries will impose corresponding tariffs on American goods. For example, the European Union can to introduce tariffs on American whiskey, which would adversely affect the relevant industry in the United States.
The reaction of other affected countries to the introduction of “steel” tariffs
New US tariffs cover all steel and aluminum imports, regardless of country of origin. Among the largest suppliers of steel to the USA are Canada, Brazil, Mexico, South Korea and Germany. The main exporters of aluminum are Canada, the United Arab Emirates, Russia and China.
Trump’s decision caused different reactions among the affected countries. Yes, the Minister of Innovation, Science and Industry Canada named tariffs as “absolutely unjustified” and warned of possible retaliatory measures. Head of the European Commission, Ursula von der Leyen expressed deeply disappointed by the US decision and promised tough measures in response.
Brazil decided not to enter into a trade war with the USA, choosing the path of negotiations and diplomacy. Seoul has expressed concern and said it intends to hold talks with Washington to discuss possible exemptions from the tariffs. Australian Prime Minister Anthony Albanese after a conversation with Trump reported, that the US may consider exempting Australia from tariffs, given the positive trade balance between the countries.
… The US is reimposing tariffs, and that decision is not open to review – at least for now. This is part of a tough trade policy in which Ukraine no longer has a special status.
Can this be changed? Theoretically, yes. Pressure on Congress, active media campaigns, lobbying are all tools of influence. But does the Ukrainian government use them persistently enough? Not yet. And Washington does not see good grounds for concessions.
And most importantly, this is another signal to Ukraine. War is no longer an automatic argument in negotiations with allies. Are we ready for this in other areas?
Tetyana Viktorova
