The global steel industry is braced for a crackdown on Chinese “dumping” by Donald Trump, who is expected to claim cheap imports are a threat to national security.

Steel industry and diplomatic sources expect Mr Trump to use this weekend’s G20 summit of world leaders in Hamburg as a stage to threaten Chinese steel and aluminium with hefty tariffs. Such a move would mark his administration’s biggest protectionist move yet.

Mr Trump is using the threat of a trade war to demand that global leaders reduce steelmaking capacity.

The US has been investigating the effect of cheap imports since April. Mr Trump could erect barriers to Chinese steel imports without needing the approval of Congress by deploying little-used Presidential powers under trade legislation dating back to the height of the Cold War. The global steel industry is preparing for action in part because of increasingly hostile rhetoric from the President.

Last week he used Twitter to declare: “[I] don’t like steel & aluminium dumping!”. Mr Trump is said to be considering tariffs of up to 20pc on foreign steel and aluminium. Other more targeted options such as a system of quotas have also been mooted.

Mr Trump’s plans could challenge World Trade Organisation rules, which allow tariffs for reasons of national security. No country has sought to test the definition of national security, however.

His crackdown would be in contrast to the free trade approach taken by the Government as Chinese imports have battered the Britain’s remaining steel industry.

As plants across the country were threatened with closure in 2015, the then-Business Secretary Sajid Javid said: “No government can change the price of steel in the global market, no government can dictate foreign exchange rates, and no government can simply disregard foreign regulations on free trade and state aid.”