Gerdau CEO Gustavo Werneck Voices Concerns Over China’s Steel Exports at Davos Forum
During the 2025 World Economic Forum in Davos, Gustavo Werneck, the CEO of Gerdau, a major global steelmaker, discussed key issues facing the steel industry. His most notable comments focused on the growing challenge posed by China's steel exports and the impacts of protectionist trade measures.
Werneck acknowledged that China's increasing reliance on export markets was becoming a critical issue for the global steel market. With many countries adopting protectionist policies and closing off trade avenues, China is left with the difficult task of finding new markets for its vast steel production. As a result, the country seeks to expand its export reach by targeting regions with more open trade policies, which could lead to increased competition and pricing pressure for domestic steel producers around the world.
The Role of China's Steel Exports in Global Markets
China has long been the world’s largest producer of steel, with its output often surpassing that of other countries combined. As the country faces internal economic challenges, including slowing demand for steel and efforts to reduce overcapacity, it increasingly looks to export its products to keep the steel industry viable.
Werneck warned that protectionist measures in countries around the world, such as tariffs, import quotas, and other trade restrictions, are not enough to stop China's push into global markets. He emphasized that such measures could be counterproductive, as they may drive China to seek alternative markets with fewer barriers to entry.
Brazil’s Steel Import Quotas: Ineffectiveness and Adjustments
One of the central topics that Werneck touched on during the discussion was Brazil's approach to regulating steel imports. Brazil, like many countries, has implemented import quotas to protect domestic industries and manage the influx of cheaper steel products from countries like China. However, Werneck argued that these measures have largely been ineffective.
He pointed out that despite the quotas, steel imports into Brazil have not decreased as anticipated. Instead, the country is still facing challenges related to excess steel imports, particularly from China. This discrepancy has led to ongoing debates between the steel industry and Brazil's Ministry of Development, Industry, Commerce and Services about how to better address the issue.
Werneck suggested that the current import quota system was inadequate and emphasized the need for more stringent measures to effectively protect Brazil’s domestic steel industry. Discussions between Gerdau and the MDIC are ongoing to explore potential solutions to tighten these regulations further.
The Global Steel Industry’s Struggles with Overcapacity and Trade Barriers
The broader context of Werneck's comments sheds light on the global steel industry’s ongoing struggles with overcapacity. Many countries, particularly China, have produced steel at rates that exceed domestic demand, flooding international markets with surplus steel. As a result, steel prices often fall, creating intense pressure on local producers who cannot compete with the cheaper foreign imports.
At the same time, nations around the world have started to introduce trade barriers to shield their industries from these global market fluctuations. However, these protectionist tactics are not always successful in reducing imports, as global trade continues to find ways around these restrictions.
Gerdau’s Strategic Response to Global Challenges
As one of the largest steel producers in the world, Gerdau is actively involved in addressing the challenges posed by both global overproduction and trade protectionism. The company is continuously adapting its business strategies to maintain its competitive edge in an increasingly complex market.
Werneck's comments highlight that Gerdau is aware of the risks that excessive steel imports from countries like China pose to the domestic steel industry in Brazil and other regions. Through ongoing dialogue with government bodies and trade organizations, Gerdau is pushing for more effective policies that will ensure the sustainability of the steel sector.
Looking Forward: The Future of Steel Trade
Werneck’s remarks underscore the importance of open trade markets for the steel industry’s growth. While China may continue to expand its steel exports, the ability of countries like Brazil to regulate imports effectively will play a significant role in balancing the global supply-demand equation for steel. The steel industry’s future will likely depend on how well international trade barriers are managed and how steelmakers adapt to changing global dynamics.
The World Economic Forum served as a platform for industry leaders like Gustavo Werneck to discuss the complexities of the global steel market and the economic policies that shape it. Gerdau, as a key player in the industry, will continue to navigate these challenges by advocating for more balanced and fair trade practices.
