On June 4, President Donald Trump declared his intention to double import steel tariffs, raising them from 25% to 50%. Trump presented the decision as a means of supporting American steelmakers and protecting American jobs while he was speaking at a rally outside of Pittsburgh.
Trump’s promotion of a $14 billion acquisition agreement between U.S. Steel and Tokyo-based Nippon Steel accompanied the announcement. He maintained that the deal would keep the United States in control of the renowned steel manufacturer.
President Trump to double tariffs on imported steel
“There’s never been a $14 billion investment in the history of the steel industry in the United States,” Trump said to a group of steelworkers. “Most importantly, U.S. Steel will continue to be controlled by the U.S.A.”
Due to the global decline in steel prices, importers are able to withstand current tariffs and continue to undercut American producers. The administration hopes that by increasing duties to 50%, American steelmakers will have more power to raise domestic prices in a market that is cooling. But overseas, the tariff increase has been criticized. The action could scuttle ongoing trade negotiations with Washington, the European Union warned. “The EU is prepared to impose countermeasures, including in response to the latest U.S. tariff increase,” a spokesman said.
The agreement was hailed by Trump as a strategic partnership. For over a year, Nippon has been pursuing U.S. Steel, and in an effort to win Trump over, it has recently increased its investment pledges. “We haven’t seen that final deal, but they’ve made a very big commitment,” the President said
Nippon’s Deal Moves Forward with Promised Investments and Federal Oversight
There are still few details available about the acquisition. Although federal oversight seems likely, Nippon and U.S. Steel have not revealed their next plans. According to The Wall Street Journal, the company has suggested establishing a distinct board for its North American operations, with a federal monitor in charge and a majority of U.S. citizens on the board.
Alongside Trump, executives took the stage to give him credit for moving the deal along. You have placed your trust in us, and we will do our part in the years ahead to earn that trust,” said Nippon Vice Chairman Takahiro Mori. “Now, we will start to make the massive investments that will transform U.S. Steel.” CEO David Burritt added, “Because of him, U.S. Steel stays mined, melted and made in America.”
According to Trump, Nippon will invest $2.2 billion in Mon Valley Works, which is located close to Pittsburgh, and an additional $7 billion in facilities located in Indiana, Alabama, Arkansas, and Minnesota. According to reports, blast furnaces will remain operational for ten years, and employees will receive bonuses of $5,000.
Featured Image Credit: Axel Garbet; Pexels: Thank You!
