U.S. President Donald Trump announced that his administration has raised tariffs on steel imports from 25% to 50%.
Trump spoke to steel workers and supporters at a rally outside Pittsburgh, Pennsylvania, and Trump increased his latest tariffs, a boon to domestic manufacturing.
"We will increase it from 25% to 50% and the tariffs on steel enter the United States of America, which will further ensure the U.S. steel industry," Trump told the crowd. "No one will solve this problem."
How the increase in tariffs will affect a free trade agreement with Canada and Mexico — or a separate deal with the UK earlier this month — is unclear.
The same is true of the deal reached between Japan's largest steel producer Nippon Steel and domestic steel companies. Still, Trump is a partnership between the two companies as a "blockbuster deal".
"In the United States of America, there has never been a $14 billion investment in the history of the steel industry," Trump said of the deal.
Friday’s rally is the return of many election season campaigns for Trump and his team.
In 2024, Trump was calling on working-class voters, including those of the Rust Belt Region, a manufacturing hub facing industry trends and greater overseas competition.
Major swing states like Pennsylvania and Michigan are located in the area, and they tilted Republicans on Election Day to help Trump advance to second president.
Trump, in turn, listed his “America First” agenda as a policy platform aimed at strengthening domestic manufacturing. Tariffs and other protectionist policies play an important role in this agenda.
For example, Trump announced an initial 25% tariff on steel and aluminum in March, causing major trading partners like Canada to respond with retaliatory measures.
In the second month, he also imposed a 10% tariff on blankets on all trading partners and higher country-specific import taxes. These tariffs were quickly suspended amid economic shock waves and widespread criticism.
Trump believes that tariffs are an important negotiation tool to encourage more investment in the U.S. economy.
But economists warn that a “hard reset” of huge tax rate hikes such as tariffs could re-shrink U.S. consumers, thereby raising prices.
Rachel Ziemba, a senior researcher at the New American Security Center, said the latest tariff rate hike on steel also said that a deal with Trump could lead to “limited benefits” given the sudden change in his policy.
In addition, Friday's announcement indicated that Trump could continue to double the tariffs on tariffs, she said.
"The challenge is that hiking steel tariffs may be beneficial to steel workers, but this is not good for the manufacturing and energy sectors," Ziemba explained. "So, overall, this is not very good for the U.S. economy and adds uncertainty to the macro outlook."
Trump's tariff policy also faces legal challenges in the United States, where businesses, interest groups and states have filed lawsuits to block import taxes.
For example, a federal court briefly ruled Thursday that Trump illegally exercised emergency powers to impose his international tariffs only to get the appeals court to temporarily suspend the ruling after a few hours.
Before announcing a tariff rate hike, a Friday rally in Pittsburgh is expected to highlight Japan Steel’s proposed acquisition of U.S. Steel, the country’s second-largest steel producer.
"We are here today to celebrate a sensational agreement to ensure that this long-standing American company remains an American company," Trump said at the beginning of the speech.
However, the merger between Japan Steel and U.S. Steel has been controversial, largely due to opposition from the union.
Trump initially said he would block the acquisition after returning to the White House in January, reflecting a similar stance taken by his former former U.S. President Joe Biden.
But, since then, he pivots and supports the deal. Last week, he announced a deal that he said would grant only "partial ownership" of Japan's steel.
Speaking on Friday, Trump said the new deal would include Japan's "$14 billion commitment to the future" of U.S. steel, although he did not provide details on how the ownership agreement would work.
"Oh, you'll be happy," Trump told the crowd of steel workers. “A lot of money is coming.”
Republican leaders also wax poetic things in the history of American steel, describing it as the backbone of the country's economy.
He said: “The city of Pittsburgh is used to produce more steel than most countries and has not even received it.
For one thing, US Steel has not publicly communicated any details of the deal to investors. Meanwhile, Japan issued a statement approving the proposed "partnership", but also did not disclose the terms of the arrangement.
Although the National Union of Steel Workers has been one of its main rivals, the acquisition splits union workers.
In a statement ahead of the rally, the alliance questioned whether the new arrangement had made “any meaningful change” from the initial proposal.
"Japan has always insisted that it will invest in U.S. steel facilities only if U.S. steel companies have completely owned their facilities," the union said in a statement.
“We have seen nothing in the report over the past few days, which shows that Nippon has gone from this position.”
Friday’s rally came at a voter base that Trump tried to feel at ease when he started his second term.
Critics noted that US steel prices have risen about 16% in the U.S. since Trump took office, and his Republican Party faces possible punishment for Congressional elections in 2026.