Steel Forum Adopts Milwaukee Framework as Excess Capacity Heads Toward 745 Million Tonnes

Twenty-eight steel-producing economies have agreed on a new framework targeting market-distorting subsidies, trade circumvention and the growing global steel surplus, with OECD projections showing excess capacity could reach 745 million tonnes by 2028.

By Paul Ploumis
Published October 1, 2026

Courtesy: Reuters

MONTREAL (Scrap Monster): Members of the Global Forum on Steel Excess Capacity have agreed on a new international framework that moves the group toward more concrete action on steel subsidies, trade remedies and circumvention as global excess production capacity continues to rise.

The 28-member forum adopted the Comprehensive Framework for Joint Action on September 30 during a ministerial meeting in Milwaukee, Wisconsin.

U.S. Trade Representative Jamieson Greer, who chaired the meeting, referred to the agreement as the Milwaukee Framework.

The GFSEC describes its members as market-based steel-producing economies. Together, they account for close to 56% of global steel imports.

Framework Moves Toward Specific Trade Actions

The new agreement goes beyond monitoring the global steel surplus and lays out specific actions that member governments intend to consider under their national laws and international trade obligations.

Members agreed to work toward reducing or eliminating subsidies and other government support that contribute to persistent excess steel capacity.

The framework specifically says governments should refrain from support that encourages capacity expansion at consistently loss-making or otherwise uneconomic steel plants.

It does, however, recognize that time-limited restructuring or industrial-transition assistance may be appropriate where it does not create a net increase in capacity and supports long-term commercial viability.

Trade Remedies and Additional Measures Are on the Table

The framework identifies antidumping, countervailing-duty and global safeguard investigations among the tools governments can use when excess capacity harms domestic steel industries.

Members may also apply other trade measures, where appropriate, to imports of steel and steel-containing derivative products originating from sources associated with global excess capacity.

The agreement does not establish one common tariff rate or require every GFSEC member to impose the same restrictions.

Instead, individual governments retain discretion to determine which measures are appropriate under their own legal systems and national circumstances.

Greer said the United States has already taken strong measures and encouraged other economies to consider their own responses to the effects of global steel overcapacity.

Country-of-Melt-and-Pour Data Targets Circumvention

Trade transparency is another major component of the Milwaukee Framework.

Members plan to strengthen steel import-monitoring systems and expand the collection and publication of country-of-melt-and-pour information.

The designation identifies the country where the raw steel was first produced in liquid form and poured into its first solid state, such as a slab, billet or ingot.

That information can help authorities distinguish the true origin of steel from the country where it may later have been processed or shipped.

GFSEC members also agreed to exchange trade data, where legally permitted, to identify suspicious trade patterns and possible attempts to circumvent existing restrictions.

The framework calls for cooperation on customs enforcement and monitoring of trade diversion so that steel displaced from one protected market does not simply move into another member's market.

OECD Sees Excess Capacity Rising to 745 Million Tonnes

The agreement comes against a worsening global supply-demand imbalance.

The OECD's latest Steel Outlook estimates that global steel excess capacity reached approximately 640 million tonnes in 2025.

That gap is projected to expand to 745 million tonnes by 2028.

Planned steelmaking capacity additions could total nearly 139 million tonnes between 2026 and 2028, while global steel demand is expected to increase by only about 34 million tonnes over the same period.

If those projections are realized, excess capacity would exceed the current combined steel production of OECD economies by a substantial margin.

An earlier GFSEC ministerial estimate put excess capacity at approximately 601 million tonnes in 2024. The newer OECD outlook updates the 2025 level to about 640 million tonnes.

China and India Remain Outside the Forum

China and India, the world's two largest steel-producing countries, are not GFSEC members.

China produces more than half of the world's crude steel and has been a central focus of concerns raised by several GFSEC members over industrial subsidies, exports and excess capacity.

Those concerns represent the policy positions of participating governments and industry groups. China has disputed international criticism of its industrial capacity policies and has previously challenged characterizations of its production as excess capacity.

India, the world's second-largest steel producer, is also outside the 28-member forum and continues to expand domestic steelmaking capacity alongside growing internal demand.

The GFSEC framework itself is written more broadly around non-market policies and practices originating outside the membership rather than assigning all global excess capacity to one country.

Steel Industry Groups Back the Agreement

U.S. steel industry representatives welcomed the framework.

Philip Bell, president of the Steel Manufacturers Association, described the agreement as a step in the right direction.

Bell also credited U.S. Section 232 steel tariffs with providing greater stability for domestic investment and expansion. That assessment reflects the Steel Manufacturers Association's position on U.S. trade policy.

The American Iron and Steel Institute separately welcomed the framework and urged GFSEC governments to follow through with concrete measures.

AISI President and CEO Kevin Dempsey said effective implementation would be critical if the agreement is to improve conditions for steel producers operating in market-oriented economies.

China Policy Remains Part of Wider G20 Debate

The steel agreement was reached as trade ministers gathered in Milwaukee for a broader U.S.-hosted G20 meeting.

Industrial overcapacity and government support have become recurring themes in G20 economic discussions during 2026.

Polish Finance and Economy Minister Andrzej Domanski said at the Milwaukee meetings that Chinese steel subsidies were a concern for Poland and other European Union countries.

China, for its part, has defended its industrial policies and rejected claims that its manufacturing strength should automatically be characterized as harmful excess capacity.

The GFSEC agreement therefore represents coordination among a group of mostly market-oriented steel economies rather than a global consensus among all major steel-producing nations.

Implementation Becomes the Next Test

The framework requires members to assess annually whether their actions are reducing the effects of excess capacity and improving global steel-market conditions.

Governments will still have to decide individually whether to launch trade investigations, introduce new import measures, change subsidy programs or strengthen customs and monitoring systems.

That makes implementation the key question for the steel industry.

The framework provides a common policy structure, but the eventual effect on steel trade will depend on which members take action, which products and countries are targeted, and how strongly those measures alter global trade flows.

Courtesy: Reuters