North American governments have taken steps to address global steel overcapacity.
In its OECD Steel Outlook 2025 report released Monday, the OECD projects a 6.7% increase in world steel production capacity between 2025 and 2027, with an additional 165 million metric tons over that period.
In 2024, global steel production capacity was 2,472.1 million tons, up 0.6 percent year-on-year.
Global steel overcapacity
At the same time, the OECD highlighted that the global steel industry will face distorted trade driven by non-trade subsidies in China and other countries.
In particular, global steel overcapacity affects North America by reducing prices and damaging local competitiveness. This causes plant closures, job losses and drives protectionist measures. It also discourages investment and complicates decarbonization efforts by shifting production to countries with fewer environmental controls.
Together, Mexico, the United States and Canada have a steel production capacity of 163.3 million tons. This volume increased 5.9% compared to 2019.
Government measures
In 2024, several countries tightened their policies to protect the steel industry. North America was one of the most active regions in the face of global overcapacity and rising imports, especially from China.
The United States and Canada imposed tariffs on steel products and strategic sectors. They did so under Section 301. In addition, they activated Section 232 to curb Mexican imports whose steel was not smelted in the region.
On the other hand, North America and the ASEAN region recorded falls of more than 30% in the prices of flat steel products imported from China.
Brazil, Mexico and Turkey also adjusted their policies. All increased tariffs to protect their industries from the massive influx of cheap steel.
In Mexico, the Ministry of Economy cancelled imports from half of the registered foreign mills. The measure seeks to avoid triangulation and tariff evasion.
To import steel, each mill must be registered. According to Marcelo Ebrard, Secretary of Economy, more than 2,000 registrations were reviewed by presidential order.
Finally, this decision coincides with Donald Trump’s announcement. The US president reactivated tariffs of 25% on steel and aluminum as of March 2025, eliminating the exemptions for Mexico and Canada under the USMCA.