The head of Japan’s steel industry expressed deep skepticism on Thursday about China’s newly announced export licensing system, arguing the measures will do little to address the fundamental problems plaguing global steel markets or stem the flood of Chinese exports that have disrupted the industry worldwide.
Tadashi Imai, chairman of the Japan Iron and Steel Federation and president of Nippon Steel, told reporters that Beijing’s planned licensing requirements—set to take effect in 2026—appear to be primarily designed to address quality concerns rather than tackle the volume of exports or support international price recovery.
“Our understanding is that this measure is intended to curb exports of substandard steel products, and we don’t believe it will be an effective countermeasure for current issues such as suppressing export volumes or influencing market prices,” Imai said during a press conference in the Japanese capital. He characterized the permits as quality control mechanisms rather than substantive trade restrictions.
Growing International Tensions Over Chinese Steel
The comments underscore mounting frustration among global steelmakers over China’s dominant position in the industry. As the world’s largest steel producer, China has faced increasing criticism for what competitors characterize as subsidized overproduction that has depressed prices and destabilized markets internationally.
Japanese steel executives, along with counterparts in Europe and North America, have long argued that Chinese steelmakers benefit from government subsidies that enable them to produce far beyond domestic demand and export the surplus at artificially low prices. This practice, they contend, has created unfair competitive conditions and triggered a wave of protectionist responses worldwide.
The licensing system represents Beijing’s attempt to address these concerns, but Imai’s dismissive assessment suggests the international steel community views the measures as insufficient window dressing rather than meaningful reform.
Japan’s Steel Industry Faces Stagnant Outlook
Against this challenging global backdrop, Japan’s domestic steel sector confronts its own difficulties. The federation projects flat demand from the construction and manufacturing sectors in the fiscal year beginning in April, with crude steel output expected to remain unchanged from current levels.
The outlook is particularly sobering given recent production trends. Japan’s Ministry of Economy, Trade and Industry forecast this week that crude steel output for the current fiscal year would decline 3.2% to 80.33 million metric tons—the lowest level since fiscal 1968, marking a nearly six-decade nadir for the once-mighty Japanese steel industry.
U.S. Tariffs Add to Industry Woes
Compounding these challenges are newly imposed American tariffs that have reshaped trade flows. Imai revealed that punitive U.S. levies—including a 50% tariff on steel imports and a 15% tariff on Japanese goods broadly—would slice approximately 20 billion yen ($130 million) from Nippon Steel’s profits this fiscal year. The company’s steel exports to the United States are expected to fall by half compared to the previous year.
However, Imai offered a measured assessment of the damage, noting that “the overall impact, including indirect effects from the 15% tariff on automobiles, was smaller than we had anticipated.” The comment suggests Japanese steelmakers may have successfully diversified markets or adjusted production in response to the trade restrictions.
The developments paint a picture of a global steel industry in flux, caught between Chinese overcapacity, rising protectionism, and sluggish demand in traditional manufacturing centers like Japan. With Beijing’s new licensing system unlikely to provide relief, according to industry leaders, the structural tensions appear set to persist well into 2026 and beyond.
WHAT YOU SHOULD KNOW
Japan’s steel industry chief has dismissed China’s upcoming export licensing system as ineffective theater that won’t solve the real problem: massive Chinese overproduction driven by government subsidies continues flooding global markets with cheap steel, destabilizing prices worldwide.
Meanwhile, Japan’s steel output has fallen to its lowest level in nearly 60 years, squeezed between Chinese overcapacity and new U.S. tariffs. The fundamental issue—China’s subsidized steel dumping—remains unaddressed, meaning the global steel crisis will likely persist despite Beijing’s regulatory gestures.
