Gerdau reshapes North American footprint as tariffs squeeze long steel imports

In the US, Section 232 steel tariffs were lifted to 50% in June, with no exclusions or quotas, and coverage expanded to derivatives; a 25% tariff also applies to automobiles and auto parts.

Canada has imposed a 25% tariff on US steel (with exceptions) and tariff‑rate quotas on other origins (excluding Mexico) with a 50% surcharge above quota. And Mexico has proposed tariffs of 10%–50% on imports from non‑FTA countries, with most steel products set at 35%.

Gerdau said it sees upcoming USMCA talks as pivotal for the future of Section 232.

It expects the full effect of the tariffs to be seen in the third and fourth quarters of 2025. According to the recent investor presentation, US imports of selected long products are trending downward from a 2022–2024 average of roughly 3.1 million metric tons per year to ~2.8 million mt in 2025.

To further limit rebar imports, Gerdau is one of six US producers who have teamed up as the Rebar Trade Action Coalition (RTAC) to collectively seek the imposition of anti-dumping and countervailing duties on rebar imports from Algeria, Bulgaria, Egypt, and Vietnam. The trade case investigations began in June, with preliminary AD/CVD rates to be set in November.

Gerdau’s strategy

In light of the tariff mayhem, Gerdau says it has rebalanced its operating footprint to minimize cross-border shipments, is capturing business left by waning imports, and is leaning into sectors benefiting from onshoring and public spending.

According to the presentation, Gerdau’s portfolio in North America comprises 50% structural shapes, 45% bars, and 5% downstream, including solar piles. With its North American headquarters in Tampa, Fla., it operates a number of mills across the eastern half of the US, two in Ontario, and one in Manitoba, Canada. In Brazil, parent company Gerdau SA, based in São Paulo, produces long products as well as hot-rolled coil, plate, and slabs. Its annual crude steelmaking capacity in Brazil is ~7.9 million mt, with roughly half produced via the integrated route (blast furnaces) and half via mini-mills (EAFs).

In bars and SBQ, the automotive sector is seen as slightly positive, despite softer North American light vehicle output. This is supported by reduced parts imports and fresh local investments — and reflected in a 60% jump in US quoting activity for SBQ versus the 2021–2024 average, the company said.

Manufacturing remains flat, keeping merchant bar steady, according to Gerdau. At the same time, infrastructure is slightly positive for rebar and piling as funds from the Infrastructure Investment and Jobs Act (IIJA) continue to flow, albeit slowly.

Data centers and renewables are strong tailwinds for structural shapes and processed solar piles, with Gerdau emphasizing its low-carbon beams and vertically integrated solar pile offerings.

Anchoring the strategy, the company is expanding its largest North American mill in Midlothian, Texas. Phase 1 of a R$1.2 billion (~US$226 million) upgrade is adding 150,000 mt of EAF melt shop capacity, with a targeted start-up in the second half of 2026. As of mid-year 2025, 59% of the project’s spend has been completed. The investment is designed to cut internal billet transfers, lift productivity, broaden product mix, and lower unit costs, with potential EBITDA of R$275 million per year. It is supplied by on-site solar power.

Adjacent investments include a 90,000-mt downstream solar pile facility (hot commissioning occurred in Q3’25, with full ramp-up expected by the end of 2026) and a new heat treatment facility for wind products, sharpening Gerdau’s position in renewables.

While Gerdau believes the North American industry can absorb lower import volumes — especially in rebar and flat-rolled products where new EAF and micro‑mill capacity is concentrated — it flagged 2027 as a pivot year. That’s when capacity (1 million mtpy of structural profiles from Mexican longs producer Deacero) in Northern Mexico is expected to target the US beam market.

For now, the company’s North American strategy is to stay domestic, upgrade flexibility, and push deeper into high-growth, tariff-sheltered demand pools across beams, rebar, SBQ, and merchant bar.