Analysis of the effects of trade barriers on wire rod prices

Wire rod is a strategic semi-finished product in the steel industry, from which numerous finished products are derived and used in key sectors such as construction, mechanics, automotive, and plant engineering.
On the commercial side, China is the world's main supplier: in 2024, it exported about 6 million tons of wire rod — three times the volume exported by Germany, the second-largest exporter.
China’s high production capacity, combined with the current weakness of its domestic demand, has driven the country to export wire rod to foreign markets at particularly competitive prices. This has put downward pressure on international prices, prompting Western countries to adopt protective measures to safeguard their own steel industries.

Trade barriers on wire rod imports

U.S. import tariffs

Already during the first Trump administration, the United States — the world’s leading importer of wire rod — had introduced additional tariffs on steel imports from abroad.
On February 10, 2025, with Proclamation 10896, President Trump reinstated the 25% tariff on all steel imports, invoking Section 232 of the Trade Expansion Act of 1962, which allows restrictions on imports of goods considered critical to national security. This measure was further tightened on June 3, 2025, with Proclamation 10947: Adjusting Imports of Aluminum and Steel Into the United States, which raised the rate to 50%.
In the case of wire rod, unlike what happens with downstream steel products — for which the 50% rate applies only to the actual steel content — the tariff is calculated on the total imported value, effectively treating wire rod commercially as steel itself.

Protective measures introduced by the EU

With Implementing Regulation 2021/1805, the European Union had already introduced trade defense measures against imports of wire rod from China, imposing an ad valorem anti-dumping duty of 24%. Additional countervailing duties and corrective measures were later introduced for other exporting countries as well, with the aim of protecting the European steel industry and curbing imports of low-cost steel.

The EU’s most recent action to protect the market is represented by Implementing Regulation 2025/621 of March 24, 2025, which introduced further safeguard measures in the steel market, as already discussed in the article: “HRC: A Partially Globalized and Financialized Market”.

In addition to the measures already in force, the European Commission is reviewing a new proposal aimed at strengthening the protection of the EU steel sector in light of the growing global overcapacity. The plan, which will replace the current safeguard regime expiring in June 2026, includes:

• a 47% reduction in duty-free import volumes, bringing them down to 18.3 million tons per year;
• the doubling to 50% of the tariff applied to imports exceeding the quota;
• the introduction of the Melt and Pour^[1] traceability requirement, designed to prevent circumvention practices and enhance supply chain transparency.

Norway, Iceland, and Liechtenstein remain exempt from tariff quotas and duties, while Ukraine will be granted special treatment in light of the country’s exceptional circumstances.

Effects of trade barriers on wire rod prices

From a theoretical perspective, other conditions being equal, the introduction of trade tariffs by a country tends to raise domestic prices and reduce prices in international markets. This happens because tariffs encourage suppliers to redirect their exports toward markets without restrictions, thereby reducing supply in countries that impose tariffs and increasing it in more open markets. Naturally, the higher the tariff, the stronger the resulting price effect.
This dynamic clearly emerges from the trend in wire rod prices across the main regional markets. The two tables below show the average annual prices recorded in the United States, the European Union, and China, expressed in euros per ton. Alongside the regional prices, the quotation of Chinese wire rod on the Shanghai Futures Exchange (SHFE) is also reported, as it represents the main global financial benchmark.

Comparison of regional wire rod prices (diameter < 14 mm)

Comparison of regional wire rod prices (diameter ≥14 mm and free-cutting steels)

Wire rod prices in China are the only ones that have fallen below 2020 levels. By contrast, in the European Union — and especially in the United States — prices remain significantly higher due to trade barriers that have limited the transmission of falling international prices to domestic markets.
For wire rod with a diameter below 14 mm, while Chinese and EU prices were broadly aligned up to 2021, EU prices (measured in intra-EU trade) in 2025 are on average 70% higher than Chinese ones, highlighting the strong protection provided by EU import tariffs.
A similar trend is observed for wire rod with a diameter ≥14 mm, whose European market price is €200/ton higher than the Chinese one.

Conclusions

Chinese wire rod prices — the main reference for the global market — are lower than their 2020 average levels. Conversely, in the European Union and especially in the United States, wire rod prices have risen sharply over the same period. This increase stems from the trade barriers adopted by the EU and the US, which, all else being equal, have supported domestic prices and amplified the global price decline, thereby widening the gap with Chinese levels.