Former President Donald Trump on stage at a rally in Pittsburgh, Pennsylvania just this past September. During his address, he announced significant progress for his state’s local steel industry. Most notably, he trumpeted a joint venture between U.S. Steel and Japan’s Nippon Steel that means a massive, $14 billion investment. This joint project seeks to increase the output of rust-belt steel nearly ten-fold. This move further highlights President Trump’s continued efforts to bring American manufacturing—and specifically American steel—back to our shores.
U.S. Steel, recognized as America’s largest steel manufacturer, has become a focal point in discussions surrounding tariffs and domestic production. During his term, Trump used this partnership to tout his administration’s biggest win at boosting national output and fortifying the local economy. Hundreds of passionate steelworkers packed the rally, giving it a vibrant energy. In the midst of this mayhem, he used the repeal as a stage to announce a plan to quadruple tariffs on imported steel, from 25% to 50%.
Throughout his remarks, Trump painted a rosy picture of his first term in office. He was beaming when he reminisced about enforcing the first 25% tariffs on steel imports in 2018. He prided himself on how central this policy was to “saving” U.S. Steel. Today, he touts it as a poster child for how his administration’s trade policies have created a booming economy.
In addition to the new tariffs, U.S. Steel is set to receive additional protection against foreign competitors, mainly from China. Trump touted the increased tariff rate. As he put it, “they can no longer jump the fence,” signaling that foreign steel will face higher barriers to enter the U.S. market.
In addition to protective measures, Trump assured those attending the rally that “there will be no layoffs and no outsourcing whatsoever, and every U.S. steel worker will soon receive a well-deserved $5,000 bonus.” This declaration was meant to announce his administration’s commitment to protecting American steelworkers’ jobs and bolster their job security.
China wasted no time to retaliate against Trump’s Steel announcement, asserting the U.S. of participating in unfair trade practices. Beijing urged the United States to “cease discriminatory restrictions against China,” raising concerns about potential repercussions for U.S. Steel’s business with Chinese markets.
U.S. Steel has an indispensable role to play in America’s steel production landscape in general. Its collaboration with Nippon Steel deeply increases efficiency and cuts reliance on international supply, particularly from China. These tariff increases and domestic investments will certainly upset the entire industry. It will have an outsized impact on domestic and foreign competitors.