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U.S. President Donald Trump has reignited trade tensions by announcing a dramatic increase in steel tariffs, doubling the rate from 25% to 50%. The move, unveiled during a rally in Pennsylvania, is intended to fortify the U.S. steel industry and support a landmark deal between Nippon Steel Corporation and U.S. Steel (NYSE:X).
The tariff hike triggered a rally in U.S. steel stocks during premarket trading on Monday. Cleveland-Cliffs Inc (NYSE:CLF) surged over 25%, Nucor Corp (NYSE:NUE) climbed 11%, and Steel Dynamics Inc (NASDAQ:STLD) rose nearly 6%, as investors bet on the boost to domestic steel producers.
Trump’s speech focused heavily on the Nippon-US Steel deal, which he described as a record-breaking $14 billion investment into the American steel industry. The Japanese steel giant, according to Trump, plans to invest $2.2 billion into Pennsylvania’s Mon Valley Works and an additional $7 billion across various states—including Indiana, Minnesota, Alabama, and Arkansas—to upgrade mills, expand mining operations, and build state-of-the-art facilities.
“This is a monumental commitment to American steel,” Trump declared, promising the deal would secure and create over 100,000 U.S. jobs. The President also highlighted a $5,000 bonus for every U.S. Steel worker as part of the agreement’s terms, alongside guarantees that all U.S. facilities will remain operational under the Nippon umbrella.
United Steelworkers President David McCall, who appeared at the rally, referred to the deal as a “merger” that could strengthen long-term industry prospects and ensure fair labor protections.
The announcement underscores Trump’s protectionist approach to trade and his aggressive strategy to support American manufacturing ahead of the election. While the Nippon deal has raised optimism in the industry, the doubling of tariffs is likely to intensify trade tensions with key partners, setting the stage for a complex global response.
