Government/Policy
November 11, 2025
US legal, political issues rattle steel and manufacturing markets
Written by Kristen DiLandro
US steel and manufacturing industries say they face a new set of uncertain market factors due to the government’s shutdown and the potential repeal of “reciprocal” tariffs.
Nov. 11, 2025, marks the 42nd day of the longest US government shutdown in history. In addition to lost paychecks and canceled flights, the ramifications of the shutdown are adding to the anxieties of domestic producers and manufacturers. Add to that the US Supreme Court’s initial reaction to Solicitor General D. John Sauer’s argument for the constitutionality of President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose “reciprocal” tariffs.
Delays sparked by shutdown
A source with legal expertise foresees the shutdown delaying the amount of enforcement that can happen for trade cases or for detecting circumvention measures. The potential result means more products getting through without being detected properly for tariff rates. In addition, that creates a backlog of enforcement cases when the government is fully operational again.
Steel consumers are noting the constraints they feel in the market due to the shutdown.
One OEM source in California said he’s delaying steel purchases for completing government jobs. He noted too much uncertainty around payment timing.
“When I spoke with our program manager, they said that the shutdown was causing the delay in new RFQs [request for quotes] and that they were getting lots more calls and emails to respond to,” he said. “With government jobs, you don’t want to buy the steel to build the projects if you don’t know whether they’ll pay you before the shutdown ends.”
The operator of a regional fabrication business in the Pacific Northwest said he continues to wait for feedback on project bids of state and federal co-sponsored projects.
“Flat steel is so cheap right now, but I have no reason to buy it because business is so bad. Private business is OK, not great. But the government work we are waiting on is a problem for us,” he stated.
Steel service center and distribution sources said they are not feeling any direct impact from the shutdown. They report smaller volumes and number of sales in general. Any lack of end-market demand due to factors outlined by the OEM and fabricator sources has not been prevalent yet.
Tariff rollbacks on raw materials
Some US states and private companies filed a lawsuit that challenges the President’s use of the IEEPA to create “reciprocal” tariffs. Because raw materials, including iron ore (including pellets), direct-reduced iron (DRI), pig iron, and hot-briquetted iron (HBI) are subject to the IEEPA tariffs, not Section 232 tariffs, the outcome of the SCOTUS decision will impact domestic steel production.
Steel advocates did not express concern regarding the outcome of the case. They noted that Section 232 tariffs offer sufficient protection to US steel producers.
A steel broker with clients throughout the US stated that overall domestic tariffs have curbed steel imports, which was the desired outcome. The undesired outcomes, he noted, include creating supply chain issues.
He pointed out that many domestic mills do not have sufficient equipment or certification to produce products that could replace foreign sources. Not that they couldn’t be, but they’re not immediately capable.
“Dropping the import tariff on raw materials would keep producers happy,” he said.
If SCOTUS finds the IEEPA tariff to be unconstitutional, EAF producers stand to save substantially, points out a market participant. The participant is a raw materials expert.
“Producers would save 10% on inputs. Sometimes that is $30-40 per short ton depending on the material and the country of origin,” he said.
“The Supreme Court has a hot potato on the table with the Trump tariffs question. That will be a game changer, if those tariffs are lessened or repealed; never a dull moment,” the steel broker added.
A service center operator in the Midwest just wants the turmoil to end.
“I have not noticed any impact from the shutdown yet. I think all the tariffs need to go away, every business would improve. There is just too much uncertainty in the marketplace right now in general,” he said.
