Market analysis of the impact of the US tariff on the Cold Rolling Mill Equipment for Steel Industry and steel demand

I. Policy background and scope of impact

Since 2018, the United States has imposed a 25% tariff on imported steel ("Section 232") and continued to strengthen trade protection measures. In 2024, the Biden administration will further expand the scope of tariffs on China, and some cold-rolled steel and downstream automation Equipment for cold rolling stainless steel will face an additional 10-25% tariff barrier. This move directly affects the global steel supply chain and the export pattern of cold rolling equipment.

II. Impact on the cold rolling automation equipment industry

Rising export costs and frustrated competitiveness

The export cost of cold rolling mill equipment for steel industry (such as rolling mills and control systems) manufactured in China to the United States has increased by 15-30%, weakening its price advantage.

Some US customers have turned to Korean and German suppliers, resulting in the loss of orders from domestic manufacturers. It is expected that exports to the United States will drop by 20-25% in 2025.

Supply chain reconstruction is accelerating

The United States promotes "Friend-shoring", and cold rolling equipment manufacturers need to set up factories in Mexico and Southeast Asia to avoid tariffs.

Companies such as Yuanjing Automation may consider building joint ventures with local partners (such as Mexican Industrial Group) to take advantage of the zero tariff policy of USMCA (United States-Mexico-Canada Agreement).

Technical standard thresholds raised

The United States has strengthened its "Buy American" policy, requiring the localization rate of equipment purchased for federal projects to be ≥55%, forcing Chinese companies to adjust their supply chains.

Investment in US UL, ASME, and other certifications needs to be increased, and compliance costs are expected to rise by 8-12%.

III. Structural impact on steel demand

US domestic steel supply and demand dynamics

Short-term inhibitory effect: High tariffs push up cold-rolled steel prices (+10-15%), resulting in increased cost pressure on automobile and home appliance manufacturers, and demand growth may slow to 1.5% in 2024 (originally predicted 2.3%).

Long-term capacity substitution: US steel mills are accelerating the expansion of electric arc furnace (EAF) capacity, and the self-sufficiency rate of cold-rolled steel may increase to 75% in 2025, with reduced dependence on imports.

Adjustment of global trade flows

Affected by tariffs, China's cold-rolled steel exports have shifted to Southeast Asia and the Middle East, with exports to ASEAN increasing by 18% year-on-year in 2024.

Due to the carbon tariff (CBAM) and US barriers in markets such as the EU, Japan, and South Korea, the proportion of high-value-added "green steel" trade is expected to increase to 30% (2025).

Chain reaction in downstream industries

Automotive industry: US automakers have turned to local procurement, but overseas production bases such as Mexico and Thailand still rely on imported equipment, forming regional demand differentiation.

New energy industry: The cold rolled stainless steel market trends for wind power and photovoltaic brackets have increased (expected to increase by 12% in 2025), partially offsetting the decline in traditional industries.

V. Future Outlook