I don't think anyone is arguing against recycling steel. The argument is against producing new steel, shipping it across the world, and then immediately scrapping and recycling it, as a way to claim it is both green and locally produced.
Even the cheapest, dirtiest iron ore from Brazil or Australia can't compete with steel scrap in the US or EU because recycling uses less than quarter of the total power and produces a fifth of the emissions that producing virgin steel does. You can't greenwash something when the green version costs way less than the polluting one. It'll be written on the price tag!
You seem to be confused. Using steel as a raw material is not "scrapping and recycling". The value of steel in engineering applications is that you can trust that the properties of a particular alloy used to make a particular part will comply with the specs. Steel from China is renowned for being unreliable and failing to comply with standardized properties.
https://www.cdmg.com/building-faqs/why-using-cheap-steel-is-...
You avoid that risk by importing steel as a raw material and use that to actually produce reliable steel. If low-quality steel is cheap enough so that after recycling it you can still make a profit then it's a sound business decision and the whole economy benefits.