Metals industry backs new US tariff actions, clashes on targets

Industry groups across the metals and mining sectors agree that trade action is needed to counter excess capacity and forced labor abroad, but opinions vary on which countries should be targeted under US President Donald Trump's evolving tariff strategy.

The US Trade Representative requested input after launching two tariff investigations following the Supreme Court’s decision in February to overturn Trump's country-specific tariffs. Section 301 of the Trade Act of 1974 authorizes investigations into whether countries engage in unfair acts that restrict US commerce. These investigations can result in new tariffs or import restrictions.

The request comes as the Trump administration turns to alternative tariff methods after the Supreme Court ruling. Following the decision, Trump implemented a temporary 10% global tariff that expires in July.

The first Section 301 investigation alleges that 16 countries — including China, the European Union, Indonesia, Vietnam, Korea, Japan, Mexico and India — developed production capacity that has resulted in overproduction and large trade surpluses. The second investigation alleges that 60 countries fail to prohibit the import of goods produced with forced labor.

In the comments submitted to the USTR, metals industry groups and companies offered competing views on which US trading partners should face new Section 301 trade penalties.

China seen as largest overcapacity contributor

There was a clear consensus among industry groups that global metals markets are facing overcapacity.

This is often driven by state interventions leading to price distortions, trade imbalances, weakened domestic industries and the discouragement of new investments, according to the comments.

In the steel sector, global excess capacity is expected to reach 721 million metric tons in 2027 and continue to increase through 2028, the Steel Manufacturers Association wrote in its comments, citing the Global Forum on Steel Excess Capacity.

"As global overcapacity continues to increase, US producers face the threat of renewed surges of steel imports, due to exports not only from China but also from other trading partners that are unwilling to right-size their steel industries," wrote Brandon Farris, executive vice president of the trade association.

Most metals groups identified China as the largest contributor to excess capacity and a dominant player in the steel, aluminum, battery and critical minerals sectors.

SAFE, an energy and supply chain organization, recommended that the USTR prioritize investigating China over other economies.

"Fueled by state-directed investment, Chinese producers refine more copper, produce more steel, and smelt more aluminum than any other country by far," Joe Quinn, executive director of SAFE's Center for Strategic Industrial Materials, testified at a May 5 hearing on the investigation.

"These major metals serve as the backbone of the US defense industrial base and require significant federal policy intervention beyond existing tariff actions," Quinn said in an email.

Disagreement on target countries

Many metals industry groups abroad argued that the countries they represent are not sources of overcapacity and should not be subject to additional trade penalties. This includes the European Aluminum, European Metals, Korea Iron and Steel Association, and Indian Steel Association groups.

"The EU, Norway and other European Economic Area countries are trusted partners for the United States, and subjecting them to additional Section 301 tariffs undercuts the spirit of last summer's Turnberry framework agreement and would be unfounded," wrote European Metals, a nonferrous metals association. The US-EU trade deal reached in Turnberry, Scotland, in mid-2025 lowered tariffs on most EU imports to 15%.

The China Iron and Steel Association called the Section 301 investigation "a typical act of unilateralism that severely undermines the international economic and trade order," in its written comments to the USTR. The association argued that priority should be given to the green transformation of steel capacity and accused the US of suppressing other countries' efforts to modernize their steel industries.

"We hope the US government and relevant industries will abandon the zero-sum mindset and break away from the obsession with tariffs, respect the development rights of other countries and regions, correct their wrong practices and halt the relevant 301 investigation," the association wrote.

US-based metals groups argued that overcapacity is global, not just pinpointed to China, and urged the USTR to consider penalties against all major trading partners.

Some groups were more specific. Alcoa Corp., a US-based aluminum producer, asked the USTR not to take action in the aluminum sector against Norway or the EU, but requested trade measures to protect the US aluminum value chain in China, India and Mexico.

The Steel Manufacturers Association pushed for actions against economies beyond China, writing that "excess capacity is not just a China problem." The association suggested the USTR add countries such as Turkey, Algeria and the United Kingdom to the investigation.

Steel Dynamics Inc., a US-based steel producer, also endorsed trade measures against multiple economies.

Imposing trade remedies

Industry groups also varied on how the Section 301 remedies should be applied, specifically with raw materials, capital equipment and existing tariffs.

European metals associations warned that broad tariffs could risk fragmenting supply chains, while US industry groups said broad coverage is necessary to prevent loopholes and circumvention.

Steel Dynamics and Aluminum Dynamics Inc., a recycler, argued that Section 232 tariffs have not been enough to address excess capacity, including the 50% tariffs on steel and aluminum, as well as the antidumping duties and countervailing duties. They are seeking cumulative tariffs with Section 301 tariffs stacking on top of existing duties rather than replacing them.

"Simply replacing existing tariffs such as the Section 232 tariffs with tariffs from these investigations — or exempting products covered by those measures from any actions taken here — would only shift the tariffs paid on the imported products from one tariff bucket to another," Steel Dynamics wrote in comments to USTR.

Caterpillar Inc. urged the USTR not to impose new Section 301 duties on products or inputs already subject to Section 232 tariffs, particularly in steel, aluminum and heavy industrial products. The construction and mining equipment manufacturer also requested that the Section 301 duties not apply to goods imported solely for remanufacturing in the US.

"Stacking additional Section 301 tariffs on these same products would further exacerbate cost pressures, disrupt supply chains, undermine US export competitiveness and fail to address the specific practices Section 301 is intended to address," Caterpillar wrote in its commentary to the USTR.

Nucor Corp., another US-based steel producer, noted that imposing Section 301 duties on steelmaking equipment or raw materials such as pig iron and direct-reduced iron would have negative effects.

"As the administration considers much needed Section 301 measures to address growing excess steel capacity, it is critical that these measures do not undermine the president's other major trade policy priorities," Nucor wrote in comments to the USTR.

Forced labor investigation

The USTR investigation of countries that fail to prohibit the import of goods produced with forced labor drew more consensus from metals groups, indicating opposition to forced labor and identifying the problem as systemic.

While the investigation spans 60 countries, many groups identified China as the main violator of forced labor guidance. China has consistently denied allegations of forced labor in the country.

The Aluminum Extruders Council, an international trade association, detailed China's use of forced labor in aluminum production and encouraged the USTR to impose Section 301 measures from the investigation in addition to Section 232 tariffs.

"Not only does China export its massive extruded aluminum capacity to the United States, at least some of which is produced from Chinese forced labor, it also exports the forced labor itself — especially to Central and South America and to Mexico," the council wrote to the USTR.

Several groups, including the Aluminum Association, opposed stacking new 301 tariffs on top of existing Section 232 steel and aluminum tariffs. Other groups, such as certain US steel industry organizations and the Aluminum Extruders Council, pushed to stack 301 tariffs on top of existing tariffs for countries found to be using forced labor.

"Forced labor is a human‑rights concern, but it is also a trade distorting practice that suppresses wages, lowers production costs, and confers an unfair competitive advantage to foreign producers that rely on coercive labor systems," the Alliance for American Manufacturing wrote in its comments.