US President Donald Trump has announced that his administration is increasing tariffs on steel imports from 25% to 50%.
Speaking to steel workers and supporters at a rally outside Pittsburgh, Pennsylvania, Trump framing his latest tariff increase as a boon to domestic manufacturing.
“We bring that to 25% to 50%. This brings iron tariffs to the United States, which will make the US steel industry even safer.” “No one is going to avoid that.”
How that tariff increase will affect free trade transactions between Canada and Mexico, or another trade agreement with the UK earlier this month remains unknown.
Additionally, the nature of the contract has become ambiguous between Nippon Steel, Japan’s largest steel producer, and US steel, a domestic company. Still, Trump carried out a partnership between the two companies as a “smash hit agreement.”
“There has been no $14 billion investment in the history of the United States’ steel industry,” Trump said of the deal.
Steel tariff hiking
Friday’s rally was a return to the site for many election season campaign events for Trump and his team.
In 2024, Trump pitched for re-election to appeal to working-class voters, including those in the Rust Belt region, a manufacturing hub that has declined in the face of changing industrial trends and growing international competition.
Major swing states like Pennsylvania and Michigan are located in the region, leaning against Republicans on Election Day to help Trump promote his second term as president.
Trump has framed his “America First” agenda as a policy platform designed to strengthen domestic manufacturing. Tariffs and other protectionist policies play a prominent role in their agenda.
In March, for example, Trump announced the first slate of 25% tariffs on steel and aluminum, with major trading partners like Canada responding to retaliatory measures.
The following month he also imposed a 10% tariff on almost all of his trading partners and a higher country-specific import tax. These were quickly suspended amid economic shockwaves and widespread criticism, but there was a 10% tariff.
Trump argues tariffs are an important negotiation tool to encourage greater investment in the US economy.
But economists warn that attempting to “hard reset” the global economy through dramatic tax cuts like tariffs is likely to bounce back to US consumers and raise prices.
Rachel Ziemba, a senior fellow at the New American Security Center, said the latest tariff hike on steel indicates that, given the sudden change in his policies, could bring “limited benefits” by negotiating a trade deal with Trump.
Additionally, Friday’s announcement shows Trump is likely to continue to double tariffs, she said.
“The challenge is that hiking steel tariffs may be good for steel workers, but bad for the manufacturing and energy sectors. So overall, it’s not big for the US economy and adds uncertainty to the macro outlook,” Ziemba explained.
Trump’s tariff policies also face legal challenges in the United States, where businesses, interest groups and states are all suing to stop tax-demand litigation over imports.
For example, federal courts temporarily ruled on Thursday that Trump illegally exercised his emergency powers to impose a drastic slate on international tariffs, simply to temporarily suspend the ruling hours later.
Trade with Nippon Steel
Before the tariff hikes were announced, the rallies in Pittsburgh on Friday were expected to focus on a proposal to acquire US steel, the country’s second-largest steel producer.
“We are here today to celebrate a blockbuster agreement that ensures that this storied American company will maintain the American company,” Trump said at the beginning of his speech.
However, the merger of Nippon Steel and US steel was controversial, and it was largely opposed by trade unions.
When he returned to the White House in January, Trump initially said he would block the takeover, reflecting a similar position taken by his predecessor, former US President Joe Biden.
But he then pivoted his stance and supported the deal. Last week he announced an agreement that he would grant Japan only “partial ownership” to US steel.
Speaking Friday, Trump said the New Deal includes Japan, which makes a “$14 billion commitment to the future” for US steel, but did not provide details on how the ownership agreement would be unfolded.
“Yeah, you’re going to be happy,” Trump told the crowd of steel workers. “A lot of money comes.”
Republican leaders also became poetic about the history of American steel, describing it as the backbone of the country’s economy.
“The city of Pittsburgh produced more steel than most countries could produce, but it wasn’t even close,” he said. “If you don’t have steel, there’s no country.”
US Steel has not publicly conveyed details of the improved deal to investors. Meanwhile, Japan has issued a statement approving the proposed “partnership” but has not even revealed the terms of the arrangement.
The National United Steelworkers Union was one of its main opponents, but the acquisition has been split with union members.
In a statement before the rally, the union questioned whether the new arrangement would result in a “meaningful change” from the initial proposal.
“Nippon has consistently maintained that it invests in US steel facilities only if it owns the company entirely,” the union said in a statement.
“Reports over the past few days suggest that Japan has returned from this position.”
Friday’s rally comes as Trump tried to reassure voters’ foundations following his turbulent start to his second term.
Critics have pointed out that since Trump took office, iron-degree prices have risen by about 16% in the US, and that his Republican could be punished by Congressional elections in 2026.
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