U.S. Doubles Steel Tariffs to 50%! Ripple Effects on Japan-U.S. Trade and the U.S. Steel Acquisition

In June 2025, the Trump administration’s 50% hike in steel tariffs is having a significant impact on steel transportation between Japan and the U.S., as well as the steel industry as a whole.

Background of the 50% Steel Tariff Hike

On June 4, 2025, the U.S. raised import tariffs on steel and aluminum from 25% to 50%.

The stated goal of this policy is the protection of the domestic steel industry, but it has dealt a major blow to key exporting nations including Japan.


This tariff system was originally introduced by the first Trump administration in 2018 and was maintained during the Biden administration. Japan had been granted a duty-free quota of 1.25 million tons per year.

What Happened to Japan’s Export Volume?

In 2024, Japan exported 1.21 million tons of steel to the U.S., averaging about 100,000 tons per month, and staying within the quota with stable trade.

However, the duty-free quota was eliminated in March 2025, and the tariff was raised to 50% in June, drastically changing the situation.

This has also affected ports and coastal vessels, creating a climate of uncertainty in the logistics industry.

High-Grade Steel Expected to Continue Exporting

Despite the tariff increase, “high-grade steel” is expected to remain in demand.
Examples of high-grade steel:

• Heat- and high-strength-resistant steel used in automobiles and aircraft engines
• Durable, high-performance steel used in power plants and bridges

Since such steel requires advanced technology and quality control, it cannot be fully produced in the U.S., meaning Japan remains a necessary supplier even with higher tariffs.

Latest Developments in Nippon Steel’s U.S. Steel Acquisition

In 2025, Nippon Steel’s acquisition of U.S. Steel for approximately $14 billion (¥2 trillion) has gained significant attention.
Initially, President Trump opposed the acquisition, saying,
“U.S. Steel should be owned by Americans.”


However, in May 2025, his tone shifted:

Why the Trump Administration Now Supports the Deal

• Avoiding construction/infrastructure issues caused by rising high-grade steel prices
• Nippon Steel promised $14 billion investment in U.S. plants, to keep the Pittsburgh HQ, and maintain labor contracts
• Stable domestic supply would help prevent inflation
• Blocking Chinese acquisition and strengthening ties with a trusted ally

Given these conditions, the administration seems to have shifted toward approval.

Conclusion

The 50% steel tariff hike is having a significant impact on Japan-U.S. steel trade.

Although volume-based exports are declining, high-grade steel, which is hard to substitute, is expected to remain in demand.


If Nippon Steel’s acquisition of U.S. Steel goes through, it will establish a system for supplying Japanese-quality steel within the U.S., potentially playing a vital role in revitalizing American manufacturing.