The Battle Between the Steel King’s Sword and Trump’s Shield: What’s the End of the ‘Tariff War’?

Exploring the Global Impact of Trump's Tariff Strategy on Steel Giants

In a surprise announcement on February 9, U.S. President Donald Trump revealed that a 25% tariff would be imposed on all steel entering the U.S. This decision, made aboard Air Force One en route to New Orleans for the Super Bowl, marked a sharp escalation in the ongoing trade war, which now includes aluminum products as well. This move came as Trump addressed a question regarding the potential acquisition of the U.S. steel company US Steel by Japanese steel giant Nippon Steel.

For the steel industry, these new tariffs are a significant disruption. According to Bloomberg, the tariffs will extend to finished steel products as well, aiming to prevent Chinese steel from entering the U.S. via third-party countries. The decision has been a major setback for South Korean steel manufacturers already struggling with overproduction and poor market conditions driven by Chinese competition.

The global steel market has been heavily influenced by Chinese enterprises, with six out of the top ten global steel companies being based in China, according to the World Steel Association. The leading steel producer in the world is China's state-owned Baosteel, while Luxembourg-based ArcelorMittal, formerly the world's number one steel producer until 2018, remains a key player.

ArcelorMittal was formed in 2006 through the merger of two leading steel companies, Arcelor and Mittal Steel. Lakshmi Mittal, an Indian-born businessman, spearheaded the merger, and quickly rose to become one of the world’s wealthiest individuals. Often referred to as the ‘Steel King,’ Mittal’s strategy has made him a titan in the steel industry, surpassing even Andrew Carnegie in terms of influence and wealth. Mittal’s legacy reshaped the global steel market by transforming the industry from one dominated by national interests to one characterized by multinational enterprises.

Mittal's rise to prominence is largely due to his aggressive acquisition strategy during the globalization wave of the 1990s. While many countries, including South Korea, relied on state-run steel companies to meet domestic demand, Mittal capitalized on the internationalization of steel production. Instead of building new mills, he focused on acquiring struggling national steel plants across the globe—buying up operations in Mexico, Canada, Germany, South Africa, and more. This M&A-driven approach made Mittal’s company a global force and set a precedent in the industry.

ArcelorMittal, with a presence in 15 countries and employing over 127,000 people worldwide by the end of 2023, has become a leader in steel production. However, the recent imposition of Trump’s 25% tariffs is poised to disrupt the company’s established network of free trade across North America and other regions. ArcelorMittal’s Canadian and Mexican plants, which export a significant portion of their steel to the U.S., are expected to be particularly affected by this move.

Despite the looming challenges, ArcelorMittal has continued to invest in its North American operations. The company announced plans earlier this year to invest $900 million in a new advanced steel manufacturing facility in Alabama, USA. In addition, ArcelorMittal has secured a strong foothold in the raw materials sector, with numerous iron ore mines in North America, South America, Eastern Europe, and Africa. Its raw material self-sufficiency rate has grown from 60% in 2009 to 80% as of its most recent targets.

ArcelorMittal’s global operations have made it one of the most diversified steel companies, with a particularly strong presence in the Americas and Eastern Europe. The company’s ability to source its own raw materials allows it to maintain a competitive edge in the global market, even as tariffs threaten its market share in North America.

ArcelorMittal's revenue outlook for 2025 is positive, with analysts forecasting an EBITDA of $7.3 billion due to increasing steel prices and demand. The company's stock price has been on the rise since the start of the year, although the ongoing tariff war has caused some adjustments. As of February 14, the company's shares closed at €27.22, up 7.93% over the past year.

Trump’s decision to impose tariffs is seen as part of his broader strategy to protect American jobs, including his support for US Steel, the U.S. steelmaker that emerged from the merger of Carnegie’s steel company in 1901. As ArcelorMittal faces these new challenges, the outcome of this 'steel war' will likely have significant consequences not only for the companies involved but also for the future of global steel trade. With Trump’s tariffs hitting global steel giants and protecting U.S. steel production, it will be interesting to see how Mittal’s response unfolds in the face of these economic pressures.