Posted on 05 Jun 2025
The US's decision to double its tariffs on imported steel to 50% poses a 'serious threat' to Malaysia's downstream steel producers and undermines the Malaysian government's ongoing tariff negotiation with the US, according to the Malaysian Iron and Steel Industry Federation (Misif).
"While Malaysia does not export large volumes of steel to the US, the tariff hike will significantly impact downstream steel producers that had remained competitive under the existing 25% tariff," Misif president Roshan M Abdullah told The Edge.
The increased tariff for imported steel and aluminium took effect on Wednesday (June 4). It doubled the 25% levy on the steel and aluminium sectors that US President Donald Trump introduced in March. Misif had previously appealed to the Ministry of Investment, Trade and Industry (Miti) to negotiate with the US to remove that initial 25% tariff.
Misif remains hopeful that the government would continue engaging with US trade officials to secure the removal of this tariff and safeguard Malaysia’s steel export interests, Roshan said.
The downstream steel industry involves the processing and fabrication of basic steel products into finished or semi-finished goods for various end-user industries. The upstream, meanwhile, typically involves the mining of raw materials and the initial processing to create crude steel.
Most local steel companies saw limited share price movement following the latest US tariff hike on imported steel and aluminium products.
Press Metal Aluminium Holdings Bhd (KL:PMETAL), an integrated aluminium producer, dropped five sen or 1.01% to RM4.90, valuing the group at RM40.37 billion. Southern Steel Bhd (KL:SSTEEL), which operates in both upstream and downstream steel production, fell four sen or 10.26% lower at 35 sen on Wednesday, with a market capitalisation of RM525 million.
In 2023, the US market accounted for 3.9% (322,282 tonnes) of Malaysia's total iron and steel exports of 8.2 million tonnes. Türkiye was the top export destination with 1.18 million tonnes, followed by Hong Kong (1.04 million tonnes) and Singapore (996,093 tonnes), according to Misif's report on the local iron and steel industry's status and outlook.
Regarding iron and steel imports, China was Malaysia's primary source in 2023, supplying 27.9% (2.04 million tonnes). This was followed by Taiwan (921,860 tonnes), Vietnam (825,860 tonnes), and Japan (808,923 tonnes).
Meanwhile, Roshan said there has been a surge in aggressive steel export offers from countries like China, South Korea and Vietnam in the first five months of this year, likely triggered by the restrictive US tariffs, that is also harming Malaysia's domestic steel industry.
"Notably, China’s total steel exports for the January–March period have already surpassed the figures recorded during the same period in 2024 — a year which, it must be noted, saw China reaching a record-high volume of steel exports.
"Without appropriate safeguards or timely intervention, the Malaysian market could be flooded with redirected imports, placing local producers at significant risk of injury. Proactive measures are urgently needed to prevent lasting disruption and to preserve the competitiveness and sustainability of the national steel sector," Roshan said.
There is an urgent need for proactive measures to prevent lasting disruption and to preserve the competitiveness and sustainability of the national steel sector, he added.
Although Malaysia began imposing anti-dumping duties on flat-rolled steel products from four Asian countries on May 11, Misif cautioned that conventional trade remedies, such as anti-dumping actions, may not effectively address these issues due to the time lag between implementation and the immediate surge in imports.
"The current lengthy investigation process can take up to 10 months, which renders it ineffective against a sudden surge in imports. However, if investigations are expedited, they can be effective," he said, citing as examples South Korea and Vietnam’s swift anti-dumping investigations against Chinese hot-rolled plate and hot-rolled coiled products earlier this year.
To mitigate market disruption, Roshan said Misif has called for stronger institutional responses, including the formation of a national Steel Task Force comprising Miti, Misif, the Malaysian Steel Association (MSA), the Royal Malaysian Customs, and other regulators.
"This task force would enable faster and more coordinated responses to sudden surges in imports, both legal and illicit," Roshan said.
Misif also proposed that the government enforce a "Buy Malaysia First" policy, strengthen enforcement against smuggling and circumvention of imported steel, and address the chronic overcapacity and low utilisation rates faced by local steel manufacturers.
Roshan also urged Miti to be more responsive, proactive, and swift in investigating and resolving trade complaints submitted by Malaysian steel manufacturers, in order to effectively tackle unfair steel imports and dumping issues.
Source:The Edge
