AISI Backs Global Steel Framework as Excess Capacity Heads Toward 745 Million Tonnes

The American Iron and Steel Institute has welcomed a new international framework targeting steel overcapacity, market-distorting subsidies and trade circumvention as OECD projections show global excess capacity could reach 745 million tonnes by 2028.

By Paul Ploumis
Published October 1, 2026

MONTREAL (Scrap Monster): The American Iron and Steel Institute (AISI) has welcomed a new international framework aimed at addressing growing global steel excess capacity, market-distorting government support and circumvention of trade measures.

The Comprehensive Framework for Joint Action, also known as the Milwaukee Framework, was adopted September 30 by members of the Global Forum on Steel Excess Capacity (GFSEC) following a ministerial meeting in Milwaukee, Wisconsin.

Kevin Dempsey, AISI President and CEO, welcomed the agreement and credited U.S. Trade Representative Jamieson Greer with helping advance the initiative.

Framework Moves From Discussion Toward Specific Trade Actions

The agreement goes beyond a general commitment to address global oversupply.

GFSEC members said they intend to reduce or eliminate market-distorting subsidies and other government support measures that contribute to persistent steel excess capacity, while recognizing that limited restructuring or industrial-transition support may be appropriate in certain circumstances.

The framework also calls on governments to avoid support that encourages new capacity at consistently loss-making or otherwise uneconomic steel plants.

Participating economies will pursue the measures through their respective national legal systems and in line with their international obligations.

Country-of-Melt-and-Pour Data Takes Larger Role

Supply-chain transparency is another major component of the framework.

GFSEC members agreed to examine ways to strengthen public steel import-monitoring systems and increase the collection and publication of country-of-melt-and-pour information.

The term identifies the country where the raw steel contained in a carbon steel product was first produced in liquid form and poured into its first solid state.

That information can help trade authorities distinguish where steel was actually produced from the country through which a finished or semi-finished product was subsequently shipped.

Members also plan to exchange trade information where legally permitted to identify suspicious trade flows and possible circumvention involving steel originating outside GFSEC economies.

Trade Remedies and Anti-Circumvention Measures Included

The framework expressly identifies several enforcement tools available to participating governments.

Members may undertake antidumping, countervailing-duty and global safeguard investigations, including possible self-initiated cases, and impose measures where appropriate.

The agreement also provides for other trade measures on imports of steel and derivative products containing steel from sources associated with global excess capacity.

GFSEC members committed to greater coordination on suspected circumvention, including information sharing, customs cooperation and monitoring of trade diversion that may result when one country imposes restrictions and excess material is redirected toward another market.

AISI Supports U.S. Approach to Steel Trade

Dempsey said AISI supports the framework and the U.S. role in bringing participating economies together.

He also praised the Trump administration's Section 232 steel tariffs and other trade measures, describing them as an effective approach to protecting domestic producers from what AISI characterizes as subsidized and non-market steel production.

That assessment represents AISI's position on U.S. trade policy.

U.S. Trade Representative Jamieson Greer similarly urged other participating economies to take stronger action against sources of global steel overcapacity, while noting that individual governments will determine which measures are appropriate under their own national circumstances.

Global Steel Excess Capacity Could Reach 745 Million Tonnes

The framework comes as the gap between global steelmaking capacity and demand continues to widen.

The OECD estimates global excess steel capacity reached approximately 640 million tonnes in 2025.

That figure is projected to rise to 745 million tonnes by 2028 as new steelmaking capacity expands considerably faster than demand.

The OECD expects steel demand to increase by only about 34 million tonnes between 2026 and 2028 while production capacity could grow by as much as 139 million tonnes.

At that level, excess capacity would approach its highest point in roughly a decade.

Subsidies Remain Central to the Overcapacity Debate

The OECD has identified government subsidies and other non-market policies as major contributors to persistent excess capacity in parts of the global steel industry.

Its 2026 Steel Outlook found that the median Chinese steel producer received subsidies relative to asset size at a rate approximately 15 times that of the median producer elsewhere in 2024.

China's steel exports also reached a record 131 million tonnes in 2025, up 153% from 2020, as weaker domestic demand pushed more material into international markets.

China is not a member of GFSEC.

The forum's members are primarily market-oriented steel-producing economies and collectively account for close to 56% of global steel imports.

Implementation Becomes the Next Test

AISI said the effectiveness of the new framework will depend on whether participating governments follow through with concrete policy measures.

The agreement requires members to assess annually whether actions taken under the framework are addressing excess capacity and its effects.

GFSEC ministers also agreed to work toward extending the forum's mandate for another three years beyond its current December 2026 expiration.

The framework therefore establishes a longer-term structure for coordinated monitoring and enforcement, but individual countries will still determine how the commitments are implemented through their domestic trade and industrial policies.

For the steel market, the central issue will be whether those national actions begin to slow new uneconomic capacity, limit trade diversion and reduce the widening gap between global production capability and underlying steel demand.