BREAKING NEWS: Trump says Section 232 tariff on steel, and aluminum to double to 50% at Pennsylvania rally celebrating Nippon-USS deal

Trump in addition revealed a few more details on Nippon’s investment in USS’ operations. But questions remain about the structure of the pact.

Higher tariffs incoming

In the latest big change to a domestic trade policy marked by announcements, threats, and reversals, Trump said the administration would double the Section 232 tariff on steel from 25% to 50%, “which will even further secure the steel industry in the United States. Nobody’s going to get around that.”

“It’s at 25%, and they can sort of get over that fence,” Trump told rally attendees Friday evening at U.S. Steel’s Irwin Works in West Mifflin, just outside of Pittsburgh. “At 50% they can no longer get over the fence.”

“I said to the group, ‘Would you rather have a 40% increase?’ Because I was thinking about 40. When I came I said, ‘Would you rather have a 40% or a 50%?’ They said, ‘We’ll take 50.’”

“I said, ‘I had a feeling you were going to say that.’ So congratulations.”

In a post on Truth Social, Trump noted that the 50% applied to aluminum as well. “This will be another BIG jolt of great news for our wonderful steel and aluminum workers,” he said.

Analyst reaction

Josh Spoores, head of steel Americas analysis for CRU, noted that the US is a net importer of steel and so requires imports to meet demand. (Editor’s note: CRU is SMU’s parent company.)

“Due to this dynamic, prices for products like sheet and coil are generally set by imports. Today, steel sheet prices are higher than any other market due to the 25% tariffs,” Spoores said.

“Any increase to the S232 steel tariffs will quickly raise the domestic price for these products used in manufacturing and construction. While higher prices will increase profits for steel mills, domestic manufacturers are the ones forced to pay – regardless of who they buy their steel from,” he added.

AISI cheers

The American Iron and Steel Institute (AISI), a trade association that represents domestic interests, praised the tariff announcement.

“Led by China, global steel overcapacity and production continues to grow, even as overall global steel demand is being impacted by the sharp downturn in the Chinese construction sector,” AISI President and CEO Kevin Dempsey said in a statement.

“Given these challenging international conditions that show no signs of improvement, this tariff action will help prevent new surges in imports that would injure American steel producers and their workers,” he added.

Nippon’s investment

As part of the partnership, Nippon is expected to invest $14 billion in USS operations. The commitment includes a $2.2 billion investment to increase steel production at Mon Valley Works. It also includes $200 million for an advanced technology R&D center “that’s being built already in Pennsylvania,” Trump said.

“In addition, another $7 billion to modernize steel mills, expand ore mines, and build state-of-the-art facilities in Indiana, Minnesota, Alabama, and Arkansas,” Trump added. “The bulk of these expenditures will be made in the next 14 months. It’s going to happen fast.”

Recall that U.S. Steel operates iron ore mining and pelletizing operations on in Minnesota. And it runs an integrated mill, Gary Works, in northwest Indiana. The company also operates an EAF oil country tubular goods (OCTG) mill in Alabama. And its Big River Steel EAF campus in Arkansas – which sports annual capacity of more than six million tons per year – is one of the biggest mills in the US.

Trump claimed the investments would “create and save” more than 100,000 jobs, including 14,000 jobs in Pennsylvania. He said that there would be no layoffs and that U.S. Steel workers would get a $5,000 bonus, which Nippon had already promised as a closing bonus to union and non-union workers in December.

Divided ranks in the USW?

One speaker at the western Pennsylvania rally was Jason Zugai, vice president of United Steel Workers Local 2227, which represents Mon Valley’s Irvin Plant. He applauded the deal and the support from other local union chapters.

“At any point, we could have chosen to give up. But we are steel workers, and giving up just isn’t something we do,” Zugai said. “These investments will ensure steel will be made right here in Pittsburgh for years to come.”

But International USW President David McCall issued a statement expressing concern about the deal with Nippon.

“We have not participated in the discussions involving U.S. Steel, Nippon Steel, and the Trump administration, nor were we consulted, so we cannot speculate about the meaning of the ‘planned partnership’ between USS and Nippon or the ‘golden share’ that some politicians have claimed will be issued to the federal government,” McCall said.

“Any final deal that may emerge from discussions between the merger parties and the federal government must be viewed through that lens, and not the lens of wishful thinking that has been adopted by far too many politicians and others,” he added.