How Trump’s tariffs hurt Ukraine’s battered steel industry
Trump is planning on introducing new tariffs today. Ukraine, which has already lost half of its steel mills to the war, risks losing the market which currently takes 60% of its steel exports.
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When the Russians destroyed Svitlana Bohdan’s hometown of Mariupol, they destroyed her life too.
She was left without a home, and had to leave her beloved job at the local steel works, which was largely destroyed. Forced to move to a neighboring city, Dnipro, Svitlana managed to find a new job in steel.
But now her job is being threatened again – thanks to tariffs from Trump’s America.
A new economic storm is brewing, and Ukraine's steel industry is among the first to feel its impact. On March 12, the United States imposed a 25 percent tariff on steel and aluminum imports from all countries. And today, April 2, Trump has promised to unleash even more tariffs that could reshape global trade.
Metals are a vital export sector in Ukraine, accounting for 7.2 percent of the GDP in 2024. For the country’s workers, these tariffs are more than just numbers – they represent jobs, budget revenues, and the country's capacity to sustain the economy during the war.
America’s tariffs threaten tens of thousands of jobs. 58% of all of Ukraine’s exports to the United States consists of metals, representing $503 million USD in trade in 2024.
"It's like a stab in the back of our economy for our business... I wish it were the other way around, with some kind of support for our economy," Svitlana told The Counteroffensive. “Unfortunately, it turns out there is no help... this is very unfortunate and insulting."
Svitlana, 49, spent most of her life working at the Ilyich Iron and Steel Works in Mariupol. When the full-scale invasion began, the plant was forced to shut down.
The plant, one of the largest in Ukraine, became the scene of fierce fighting in Mariupol in February 2022, where the 36th Separate Marine Brigade was holding the line. Ilyich Iron and Steel Works did not survive the war; part of it was destroyed, while another section was looted by the Russians, leaving nothing behind.
In Dnipro, Svitlana spent most of her time with her family. Initially, the company paid part of her salary, but later they offered her the choice to transfer to another company owned by the owner or resign. Svitlana decided to stay in Dnipro and found a job at the Interpipe steel plant.
"My parents also worked in the steel industry. It's promising [with good career progression], the salary is much higher [than in other fields]. It's a career," Svitlana said.
Svitlana’s company produces steel wheels for trains, subways, and trolleys. Some of these products have been exported to the U.S. market.
However, the situation has now become more complicated: Interpipe, like other steel producers, is now subject to a duty when exporting to the U.S. Svitlana thinks she will have to work harder and more persistently now to keep her company running.
Trump's steel tariffs were originally in effect in 2018, when his administration imposed a 25 percent tariff on numerous countries, albeit with several exceptions. Ukraine was one of those exceptions. Under the Biden administration, following the onset of the full-scale invasion, Kyiv was exempt from duties on imports of steel and steel products.
The newly imposed tariffs focus on steel and aluminum. As a result, materials become more expensive for the American consumer, and Ukrainian steel becomes less competitive.
They apply to materials rather than goods made from these metals. For instance, tariffs will be levied on sheet metal, pipes, and wires imported from abroad, but not on items such as pots, car parts, irons or the wheels for trains that Svitlana makes.
Trump says that the new tariffs will compel foreign companies to establish factories in the United States and encourage consumers to purchase American steel. However, during his first term, when he imposed similar tariffs, imports decreased by 27 percent (10.2 million tons), while domestic production only increased by 7.5 percent.
Trump’s first term tariffs only destabilized the market: steel demand remained high, but limited imports could not make up the shortfall, leading to higher prices. Concurrently, steel prices in the United States surged, negatively impacting automakers such as Ford and GM.
In 2013, before the war with Russia began, 12 plants in Ukraine produced 32.7 million tons of steel, said Andrii Tarasenko of GMK Center, a consulting company focused on the European iron and steel market. At that time, Ukraine was ranked 10th in the world for steel production.
"Metallurgy has consistently served as a significant source of foreign currency for Ukraine in international markets," economist Ihor Burakovsky told The Counteroffensive.
Since the Russian invasion, Ukraine has lost half of its steel mills to occupation and destruction. As a result, steel production now is a quarter of pre-war levels more than a decade ago.
Despite the fighting, Ukraine remains one of the top 20 metal producers globally.
"We had substantial volumes in the U.S.... We will need to work much harder, but the pay will remain the same. However, I believe there will be additional shifts; we will be working seven days a week," Svitlana said.
The primary market for the plant, as for the rest of Ukraine, is the European Union.
Two-thirds of Ukraine's steel exports go to the EU, Tarasenko said. However, the tariffs Trump imposes will also hit the European market, which may indirectly affect Ukrainian producers. The EU used to supply approximately 4 million tons of steel to the U.S. each year.
Restoring steel production to pre-invasion levels is impossible, Tarasenko said. Rebuilding the industry requires international financing and affordable electricity, but rising energy costs from Russian attacks threaten its future.
Svitlana still believes that her Interpipe plant will survive and operate as usual. However, she continues to dream of returning to her hometown of Mariupol once it is liberated from the Russian occupiers by the Ukrainian armed forces.
"If I have to spend a year rebuilding the plant, I will spend a year rebuilding it," Svitlana said. "The main thing is to be home. To visit the grave of my parents. That's the most important thing."
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NEWS OF THE DAY:
Good morning to readers; Kyiv remains in Ukrainian hands.
U.S. PRESSES EUROPE TO KEEP BUYING AMERICAN ARMS: U.S. officials have urged European allies to keep purchasing American-made weapons as the EU bolsters its defense industry while potentially limiting U.S. arms in procurement tenders, according to five sources who spoke with Reuters.
The European Commission's latest proposals aim to increase military spending and enhance joint defense projects, raising concerns in Washington about a reduction in U.S. involvement.
During a March 25 meeting, Secretary of State Marco Rubio informed Baltic foreign ministers that excluding U.S. companies from European defense contracts would be seen unfavorably.
U.S. LIFTS SANCTIONS ON RUSSIAN NEGOTIATOR: The United States has removed sanctions on senior Russian negotiator Kirill Dmitriev to allow him to visit Washington and meet with Trump envoy Steve Witkoff.
Dmitriev's visit will mark the first time a senior Russian official has come to Washington for discussions since Russia's full-scale invasion of Ukraine in 2022. Dmitriev is a close adviser of Putin: in February, he traveled to Riyadh with senior Russian officials to discuss ways to end the war against Ukraine.
TRUMP OFFICIALS: WAR MAY NOT END IN MONTHS: Trump officials have recently discussed the possibility that the US may not secure a peace deal in Ukraine in the coming months and are developing new plans to apply pressure on both Kyiv and Moscow.
At the start of his second term, Trump aimed to secure a complete ceasefire in Ukraine by April or May, followed by enduring peace in the ensuing months.
However, neither of these goals seems achievable at this time, raising the risk of a prolonged conflict and the necessity for increased Western support for Ukraine's military operations.
U.S. PREPARES NEW RUSSIA SANCTIONS: A group of 50 Republican and Democratic parties agreed to impose sanctions on Russia if it refuses to negotiate peace in good faith.
The sanctions will impose a 500% tariff on imports from countries that buy Russian oil, petroleum products, natural gas, or uranium. Additionally, the sanctions will prohibit U.S. citizens from buying Russian government debt.
U.S. officials have expressed frustration over Moscow's delays. Russian officials indicated that a negotiated naval ceasefire in the Black Sea depends on sanctions relief, contradicting a U.S. statement from last week.
DOG OF WAR:
Today's Dog of War is Flika, the beloved dog of Myroslava’s parents-in-law. During a visit last week, Myroslava spent time with Flika in the courtyard and couldn’t resist capturing some photos of her beauty.
Stay safe out there.
Best,
Myroslava
Hopefully the UK can up its intake of steel; Trump seems to think the world cannot exist without him, but perhaps the world can show him that he is just a dictator, and a petty one at that!
Thank you for the update. I guess we are all waiting for Trump to announce his great economic plan of tariffs.