If you are in the audit team of a steel producer, you are lucky. Steel is an interesting industry, which can provide a lot of new knowledge. Also, it’s a great training environment for auditors. From stock take, costing to impairment & written down testing, audit team engages with a wide range of complex procedures… These areas often require a high level of professional judgment, and impact significantly on the financial statements.

However, there is always a risk that the audit team needs to address annually: tariffs.

Interestingly, the steel industry is always targeted by new tariffs. For example, there have been recent tariffs from the EU on some producers in India and Vietnam, and from Vietnam on certain Chinese steels. Have you ever asked a simple question – why does this happen so frequently? The answer lies in the important role of the steel industry in the economy and society.

Firstly, for many countries, it is a long-established industry. Steel production has been a cornerstone of economic growth in Europe and the US. Since the 19th century, when many Asian and African countries were still undeveloped, numerous steel plants were installed in the West. Regions like the Ruhr Valley in Germany or Lorraine in France are well-known for their steel heritage.

Secondly, steel is a critical material for a wide range of essential industries. Construction, infrastructure, energy, automobile – these sectors all depend heavily on steel. They consume vast quantities each year, making it a strategically important material with consistently high demand.

Thirdly, its contribution to the economic growth and societal stability. The steel makers generate billions of USD annually, contributing hugely to the state account. Also, it employs thousands, supporting jobs, incomes, and regional stability. A decline in domestic steelmaking can have ripple effects far beyond just one industry.

Because of this, any negative news about the steel industry tends to attract strong attention, and often political response. In Western countries, one key concern is the rise of cheaper steel imports from developing nations. This isn’t just a question of competition, instead it’s one of survival.

So, why is steel from these countries cheaper?

1. Lower input costs – labor, materials, and land are often less expensive in developing countries like China or India.

2. Lighter regulation – Western countries are implementing strict ESG requirements, such as carbon emission reductions, which are often less enforced elsewhere. That allows foreign producers to use cheaper, less sustainable technology.

3. Currency advantage – a weaker local currency makes their exports more affordable, creating a competitive edge.

Understandably, Western governments cannot simply let the cheaper steels dominate their domestic markets. Therefore, they have been setting up some barriers, including technical barrier, new ESG requirements on import products, and notably tariffs. By doing so, they can give room for their domestic steel makers to compete. Otherwise, domestic producers would struggle to compete, leading to broader economic and social consequences.

Tariffs on steel aren’t just trade policies – they’re shields for a vital industry that shapes economies and societies. For auditors, tariffs impact on revenue impacts, inventory costing and valuation, and risk assessment and compliance – high-stakes work that sharpens your skills. It is one more reason why auditing steel companies is such a rich and challenging experience. It pushes you to grow, to think critically, and to understand the world beyond just numbers.

So – do I think it’s good for your career development? Yes, absolutely. And if you’re lucky enough to be in this industry, I hope it’s helping you grow too.