Trump doubles steel tariffs, keeps Nippon Steel guessing

"We are here to celebrate the great agreement, to ensure that historic American companies continue to be American companies," Trump told the assembled steel-plant workers, referring to the "partnership" agreement Nippon Steel has reportedly accepted for U.S. Steel, rather than the full acquisition it sought to make the US steel producer a wholly-owned subsidiary, as Mysteel Global has reported.

"We're going to bring it from 25% to 50% – the tariffs on steel into the United States of America – which will even further secure the steel industry in the United States," CNN quotes Trump telling the crowd. He added, "At 25%, they can get over the fence. At 50%, they can't get over that." Later, on his social media site, Trump wrote the import duty on aluminum would be raised to 50% as well, from 25% now.

Also attending the rally were U.S. Steel CEO David Burritt and Takahiro Mori, Nippon Steel's vice chairman, who played a central role in negotiating the deal. In addition to praising Burritt, Trump highlighted Mori's contribution "to making the landmark investment happen", saying Mori is highly respected worldwide for what he's done with steel, Japan's Kyodo News reported. "This is a business (with U.S. Steel) that he has been working on for many years – thank you, Takahiro," Trump said.

What Mori would have wanted to hear most from Trump – but didn't – was a definitive statement from the US president that he would formally approve the deal by the final deadline of June 5. When asked by reporters later, Trump said, "I have to approve the final contract, but we haven't seen it yet," according to CNN.

Tokyo-based Nippon Steel has not disclosed details of the deal's status, and industry pundits are keenly interested, given Trump's repeated emphasis on the Japanese mill being a 'partner' rather than an owner, and for U.S. Steel management decisions to be made by Americans.

"The purpose of the Trump administration (regarding U.S. Steel) is to maintain employment and production, and the word "profit" is not included in it," a Japanese analyst noted. "I'm concerned that the management of U.S. Steel will not proceed as Nippon Steel expects in the future," Japan's Jiji Press reported the analyst as saying.

Also, what Mori thought of Trump's announcement on Friday of his plans to double the import duty on foreign steel – and indeed, Trump's promise that "all U.S. Steel employees will receive a $5,000 bonus" from the "incredible deal" he'd reached with Nippon Steel – has not been reported.

During 2024, Japan shipped 1.21 million tonnes of steel to the US including ferroalloys and pig iron, down by 1.5% on year, Japan Iron & Steel Federation (JISF) data show. However, between January and April this year, Japan's US-bound steel exports had plunged by 16% from the same four months of last year to 343,900 tonnes, the JISF data show.

Arguably, with so much riding on a successful outcome of the Nippon Steel-U.S. Steel negotiations (Japanese Prime Minister Shigeru Ishiba had personally raised the issue with Trump in February), the Japanese steel industry has so far avoided comment regarding the higher tariffs. But after the initial 25% tariff was imposed in March, JISF chairman Tadashi Imai – who is also president of Nippon Steel – had warned that Trump's tariffs could reduce Japan's annual crude steel production this year to the lowest level in more than half a century, as reported.

Other countries are less encumbered. "We strongly regret the announced increase of U.S. tariffs on steel imports from 25% to 50%," the European Commission said in a statement on Saturday. "This decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic", it said, adding that the EU was prepared to impose countermeasures, including "in response to the latest U.S. tariff increase."

In South Korea, the fourth-largest steel exporter to the U.S., the steel industry is in turmoil, according to local reports. Korea's steel exports globally also fell 12.4% year-on-year to $2.56 billion during May 1-25, with those to the U.S. plunging 20.6%, JoongAng Ilbo reported. In its economic outlook report released last month, the Bank of Korea said South Korea's steel exports to the U.S. would fall by 1.4% this year after the 25% tariff went into effect, but the decline will be larger when the higher tariffs kick in.

On Monday morning, the Ministry of Trade, Industry and Energy (MOCIE) hosted an emergency meeting at the Korea Iron and Steel Association offices in Seoul with major steel companies including POSCO, Hyundai Steel, KG Steel, SeAh Steel, and Dongkuk Steel, as well as aluminum industry officials, to examine the impact of Trump's tariff hike on Korean industry, Yonhap News reported.

The steelmakers urged the government to quickly share information and promote consultations with the U.S. while MOCIE said it would "closely monitor the implementation of U.S. tariffs and actively respond to minimize the damage to Korean companies within the framework of the ongoing negotiations with the U.S.," Yonhap noted.

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com