Steel trade hinges on U.S.-China tensions

The US administration may want to ease its tariffs on steel trading, but countries in Europe and beyond are reluctant to reduce the protection of their metallurgists as long as the complicated trade relationship between the US and China prevails.

After the U.S. sold 25 percent of tariffs on all U.S. steel imports in March, Washington has struck deals with countries including South Korea, Argentina, Brazil and South Africa to end tariffs in exchange for import quotas.

The United States, the world's largest steel importer, is believed to have signed similar deals with Canada and Mexico this year and is in talks with India, the United Arab Emirates, Japan and the EU on tariff deals.

It also satisfied thousands of tariff exemption requests from US steel consumers.

However, countries or regions with relatively open markets such as Europe are looking to protect their steel industries for fear of increased exports from China if its economy slows further as a result of a wider trade war between the US and China.

Steel imports to Europe rose 10 percent in the third quarter, although the bloc blocked protective tariffs on metal imports in July to guard against redirected trade flows from US tariffs.

The global steel sector is unlikely to afford the sharp rise in Chinese steel exports, as it already has about 560 million tonnes of spare capacity, which is expected to increase over the next two years, as demand growth slows.