Under the shadow of tariffs, the steel industry is struggling to move forward. ArcelorMittal warns that a trade war will weaken demand.

ArcelorMittal SA, the multinational steel and mining giant headquartered in Luxembourg, released its latest earnings report on Wednesday. The financial data showed that under the backdrop of the escalating global trade war, the aggressive tariff policies in the United States and the support for local steel companies in European countries are driving steel prices upward. However, the steel giant warned in its financial report that the uncertainty surrounding Trump's tariff policies and global trade expectations could have a significant impact on steel demand and the entire steel industry supply chain costs and profits. The world's largest non-Chinese steel manufacturer stated in its earnings statement on Wednesday that the subdued demand brought about by the global trade turmoil could lead to steel demand falling below the strong performance growth guidance previously given by the company's management earlier this year. The company stated in its declaration on Wednesday that these compound adverse factors could lead to steel demand falling below the optimistic expectations of the company's management earlier this year. At a performance conference in February of this year, as the largest steel producer in the Western world, ArcelorMittal's management had forecast that global steel consumption outside of the Chinese market would grow by 2.5% to 3.5% driven by customer inventory replenishment. In February, the returning US President Donald Trump administration expanded the 25% steel import tariff to all countries that were previously exempt from tariffs, including Canada and Mexico both major steel suppliers to the US. Meanwhile, Europe also intensified trade protection measures, not only to cope with the global tariff war initiated by Trump but also to address the continuous downward pressure on prices brought about by the large supply of inexpensive steel from Asian markets. "Looking ahead, caution is indeed needed for the short-term outlook," said Aditya Mittal, CEO of ArcelorMittal in a statement. "If the uncertainty of global trade terms cannot be resolved quickly, it will damage the commercial confidence in the global market and may further disrupt the global economy." It is not yet clear whether the continuously escalating new round of global trade war would ultimately benefit or harm the steel industry. However, according to the information revealed in ArcelorMittal's financial report, at least in the short term, global steel demand may cool down. It is understood that ArcelorMittal's steel business in Canada and Mexico mainly exports various steel products to the United States in large quantities, but stricter production capacity guarantee measures in Europe and India are expected to significantly boost local profits, potentially offsetting the downward trajectory of demand brought about by the US government's imposition of steel industry tariffs and the "10% tariff benchmark" for most countries globally. ArcelorMittal is a multinational steel and mining giant that focuses on flat, long, and tubular products as well as its own iron ore business. It is the second-largest crude steel producer globally and has significant technological advantages in automotive high-strength steel, electrical steel, and engineering construction steel plates. The company holds the number one market share globally in the automotive steel sector, supplying advanced high-strength steel and non-oriented silicon steel for electric vehicles to manufacturers such as Toyota, General Motors, Volkswagen, and Stellantis. It also has a leading position in the construction of H-beams, rails, and concrete reinforcement in North America and Europe, with nearly 14 large-scale production lines. Earlier this month, the EU announced a 90-day postponement of retaliatory measures against the steel and aluminum tariffs initiated by the US government, warning that if satisfactory results cannot be achieved in the tariff and bilateral trade negotiations between the US and the EU, the measures will automatically take effect. Benefiting from the unexpectedly strong performance of its iron ore mining business, the steel giant headquartered in Luxembourg slightly exceeded analysts' general expectations in the first quarter overall earnings. The company's first-quarter EBITDA reached $15.8 billion, higher than analysts' general expectation of around $15.6 billion. The Trump administration decided to impose a staggering 145% tariff on China (one of the US's top three trading partners) and at least a 10% tariff on most other countries. Many forecasters have warned that the global economy will slow sharply in the future, with some even predicting a deep economic recession in the US and globally this year. This is partly due to the sustained inflationary pressure on US households since the high inflation period of 2022, which may lead to a significant downturn in household demand, with some households already struggling with savings, and household demand or consumption accounting for about two-thirds of the US GDP. Although the Trump administration earlier this month implemented a 90-day deferral period for some of the most stringent "reciprocal tariffs," adjusting the standard tariffs to 10% for most countries excluding China during this period, according to the Bloomberg Economic Research team's prediction, the "effective tariff rate" in the US is currently close to 23% the highest level in over a century, which has already had a severe impact on consumer and business confidence.