Trump doubles steel tariffs to 50% in push to protect US industry

US President Donald Trump announced on May 30 that he would increase tariffs on steel and aluminium imports, raising them from 25 per cent to 50 per cent. The new tariff rates, which will go into effect on June 4, are part of Trump’s ongoing effort to bolster American manufacturing and secure the US steel industry.

Speaking at the US Steel Mon Valley Works–Irvin plant in West Mifflin, Pennsylvania, Trump emphasised that the move would “further secure” the American steel industry. “At 25 per cent, they can sort of get over that fence. At 50 per cent they can no longer get over the fence,” he said, addressing the steelworkers at the rally.

He added that the steel tariffs would protect jobs and prevent foreign steel producers from undercutting American manufacturers.

The new tariff also offers a backstop for Trump’s promise that the US Steel-Nippon deal would benefit steelworkers in the critical battleground state of Pennsylvania.

The steep tariff hikes come amid rising steel prices in the US, which have surged 16 per cent since Trump came to power in January 2025. As of March, steel in the US was priced at $984 per metric tonne, far above the prices in Europe ($690) and China ($392), according to the US Commerce Department.

According to US import data for 2024, Canada is the largest supplier of steel to the US, with Brazil and Mexico following closely behind. Around 77 per cent of US steel imports in 2023-2024 came from the top 10 nations that export steel to the US. India ranks 14th among the list of top steel exporters to the US, according to the US Department of Commerce.

While the tariff increases are designed to protect US steelworkers, they are expected to have significant implications for downstream industries, including construction and automotive manufacturing.

Experts warn that the price hikes could lead to increased costs for building materials and could impact the price of housing and car production.

Trump's shift on Nippon Steel deal

In addition to the tariff announcement, Trump used the event to promote his administration’s backing of US Steel and Japan’s Nippon Steel deal.

Earlier this year, Trump opposed Nippon’s bid to fully acquire US Steel on national security grounds. However, he reversed course in May, endorsing a revised “partnership” between the two companies.

Trump described the deal as a “blockbuster agreement” that would ensure US Steel remains under American control while allowing for significant investment from Nippon. The Japanese steelmaker has pledged to invest $14 billion in US Steel’s facilities, including plants in Pennsylvania, Indiana, Arkansas, Alabama, and Minnesota.

Nippon will also maintain US Steel’s blast furnaces at full capacity for at least a decade and guarantee no layoffs or outsourcing of jobs.

Despite the promises, the deal has faced criticism from labour unions, particularly the United Steelworkers (USW). The union expressed concerns over the potential impact on national security and the future of American jobs.

“We are most concerned with the impact that this merger of US Steel into a foreign competitor will have on national security, our members, and the communities where we live and work,” said USW President David McCall in a statement.

At the rally, Trump reassured workers that the deal would maintain American control over the iconic steelmaker, stressing that US Steel’s headquarters would remain in Pittsburgh.

He also highlighted the economic benefits of the deal, claiming it would create 70,000 jobs and inject $14 billion into the US economy. “You’re going to stay at an American company, you know that, right?” Trump said to the crowd.

The deal is still under review by the Committee on Foreign Investment in the United States (CFIUS), which is tasked with ensuring that foreign investments do not pose a threat to national security.

Mixed reactions

While the US Steelworkers union has remained cautious about the deal, some individual workers have expressed optimism about the potential for modernisation and increased investment.

USW, which represents thousands of hourly workers at US Steel facilities, said after Trump's speech that it had not participated in discussions involving Nippon Steel and the Trump administration, "nor were we consulted."

“We cannot speculate about the meaning of the ‘planned partnership’,” said USW International President David McCall in a statement.

“Whatever the deal structure, our primary concern remains with the impact that this merger of US Steel into a foreign competitor will have on national security, our members and the communities where we live and work,” McCall said. “The devil is always in the details,” he added.

In contrast, Pennsylvania state lawmakers and federal officials have been more supportive of the deal, citing the investment commitments from Nippon Steel and the assurance that the US government will maintain significant control over the company.

Highlighting the importance of national security in the deal’s structure, US Trade Representative Jamieson Greer told CNBC, “The underlying principle is that the United States should have control over key critical sectors.”

Trump’s announcement marks a significant shift in his stance toward foreign investments in US industries, particularly in the steel sector. During his first term, he made clear his opposition to foreign ownership of US steelmakers. However, his new approach appears to be driven by a desire to protect jobs and ensure the long-term health of the American steel industry.

The fate of US Steel remains a crucial issue for Trump, particularly as the company’s operations are tied to key battleground states like Pennsylvania. The deal with Nippon Steel could be a key factor in shaping voters' perceptions of Trump’s ability to protect American manufacturing.

With the new tariffs set to take effect next week, the steel industry, and the broader economy, will likely feel the impact of Trump’s trade policies in the months to come. While the tariffs are aimed at securing the steel industry, the concerns regarding their long-term effects on prices, jobs, and global trade remain.