Analysts warn that steel prices may increase due to the new 50% tariffs

President Donald Trump announced on Friday that he will raise tariffs on steel imported into the United States from 25% to 50%, aiming to further protect American steelworkers.

Speaking at a U.S. Steel facility in West Mifflin, Pennsylvania, Trump told an applauding crowd of employees that he had a “major announcement.” He said the higher tariff would “secure the steel industry in the United States” and warned that no one would be able to “get around that” new tariff rate.

“We are going to be imposing a 25% increase,” Trump explained. “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. Nobody’s going to get around that.”

He added that he had considered setting the rate at 40%, but industry leaders persuaded him to go further. “At 25% they can sorta get over that fence,” Trump said. “At 50% nobody’s getting over that fence.”

Trump’s move builds on the sweeping tariffs he first imposed on March 12, when he set a 25% tax on all steel imports and a 10% levy on aluminum. At the time, Canada responded with its own duties, and American auto makers warned of higher costs. The European Union also announced countermeasures, which it later dropped.

On Friday, Trump praised those original measures, claiming they saved the U.S. steel sector from collapse. He said that without the first round of tariffs, “all steel would have been foreign-made and factories would have closed.”

Analysts warn that steel prices may increase due to the tariffs

Still, analysts warn that higher levies could push up prices for steel, a critical material in construction and manufacturing, two industries Trump has said he wants to strengthen. Since March, the price of domestically produced steel has climbed, as American mills no longer face as much competition from abroad.

A 2023 report by the International Trade Commission looked back to when Trump applied steel tariffs in 2018, finding that U.S. steel output did rise, but costs climbed for cars, tools, and machines. Those higher expenses cut production in affected industries by more than $3 billion in 2021, the agency said.

Trump is using a law known as Section 232, which lets the president impose tariffs on imports deemed a threat to national security. Last year, the U.S. bought $31.3 billion worth of iron and steel. Canada topped the list at $7.6 billion, according to Commerce Department figures.

Later in his remarks, Trump turned to another issue: the sale of U.S. Steel to Japan’s Nippon Steel. During his 2024 campaign, he had opposed the deal, and President Joe Biden had blocked it, citing security concerns. But Trump said he came to believe Nippon could save the company and keep jobs in America.

“U.S. Steel was being sold into foreign hands with no protections for our great steel workers,” he said. “And I said there’s no way we’re gonna let that happen. I was watching over you.”

But he added that Nippon and U.S. Steel leaders kept improving the terms. “They kept asking me and I kept rejecting them: No way, no way, no way,” he said. “Every time they came in, the deal got better and better and better for the workers.” A key change was a so-called golden share that gives the U.S. government a say in company decisions.

“I’m going to be in Washington; I’m gonna be watching over it,” Trump promised.

Wrapping up, Trump said that with higher tariffs and the Nippon agreement, U.S. Steel workers had much to celebrate. He invited several employees onstage, and they spoke about the challenges the industry had faced. They thanked him for his actions.

“This is going to be a very big day,” Trump told the workers. “This is going to be one of the biggest days in your life.”

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