The U.S. steel sector is surging, bolstered by tariffs and regulatory rollbacks under President Donald Trump.
Production rose nearly 5 percent in July compared to the same month last year, according to the World Steel Association.
Japanese firm Nippon is pouring billions of dollars into operations at U.S. Steel, an icon of American manufacturing, after finalizing a deal to purchase the firm that gives the U.S. government a “golden share.”
The steel firm CMC is aiming to cut the ribbon on a new mill in West Virginia later this year. Nucor, the largest steel producer in the U.S., is planning to start operations next year at a $4 billion new mill in the Mountain State. And ArcelorMittal is putting $1.2 billion toward a new plant in Alabama.
“There’s about $20 billion of investment that’s been announced over the last four or five years that is moving full steam ahead,” Philip Bell, president of the Steel Manufacturers Association, said in an interview. “The rest of the world has seen a slight dip in steel production, but the U.S. hasn’t.”
This boost to American steel was eyed as an aggressively clean and green one under former President Joe Biden, driven by hundreds of millions of dollars in grants to decarbonize the industry. Instead, those green commitments started to fall apart before Trump took office, then ground to a halt as the president killed off his predecessor’s climate policies.
Now, for people living near hulking steel mills, which often co-exist with other industrial plants in blighted areas, the outlook is far bleaker than the bullish market.
Locals in Gary, Indiana, for example, like former U.S. Steel worker Valerie Denney, are bracing for a future that repeats its polluted past.
The 120-year-old U.S. Steel is signaling it will invest billions to extend the life of a coal-based blast furnace at its Gary Works steel plant before pivoting to an extension at the Edgar Thomson coal-based furnace near Pittsburgh.
“Nobody bothers to tell the people who are living 5, 10 miles from the plant what the plan is, and their health and their livelihoods are directly affected,” Denney, a volunteer with the environmental group Gary Advocates for Responsible Development, said in an interview.
“The emissions are cancer-producing agents, and they’re coming out in huge amounts,” she said.
A U.S. Steel spokesperson said Nippon plans to publicize details on the investments later this year.
Cutting regulations
Meanwhile, EPA is pushing through regulatory rollbacks for steel.
The agency is putting a two-year pause on hazardous air pollution rules published last year by the Biden administration for “integrated” steel mills — industry parlance for those that use raw materials like iron ore. The rules would regulate mercury, hydrochloric acid, dioxins and other pollution — and require monitoring for chromium beyond a plant’s property.
Internal EPA communications viewed by POLITICO’s E&E News show cozy dialogue between the agency and industry over a related rule that would ratchet up regulations on coke plants, which refine coal for use in steel plants.
Last week, Denney and others sparred with industry representatives in public meetings over the pauses at EPA. Environmentalists say the rollbacks will harm local communities.
“There may be rhetoric from industry leaders about producing clean products and lower emissions,” Annie Fox, a law clerk with the Pennsylvania-based Clean Air Council, said in an interview. “But they fight and spend an enormous amount of money lobbying for weaker regulations.”
In recent weeks, an explosion at U.S. Steel’s coke plant in Clairton, Pennsylvania, killed two people and injured at least 10, spurring a debate over safety at steel plants. While details are scant on the incident, Fox says more regulations like those being paused could have protected workers and the surrounding community.
“By tracking down a malfunction that is causing a spike in emissions, there could be some measures that prevent an incident,” she said. “But for this particular incident, we don’t know if that’s the case.”
Soon, EPA is likely to roll back rules on particulate matter, which is miniscule pollution that can travel deep into the lungs of those exposed to it. The agency is also moving to repeal the legal authority to regulate greenhouse gas emissions like the carbon dioxide that spews from coal-based steel plants.
“The big trend here is the moving away from the decarbonization process,” Astrid Grigsby-Schulte, project manager of the Global Iron and Steel Tracker at the firm Global Energy Monitor, pointing to the investment plans at Gary Works. “If we lock in that blast furnace production, we’re losing our advantage as green steel demand goes up.”
Under Biden, the Department of Energy sought to deliver hundreds of millions of dollars in grants to decarbonize the sector — largely with green steel projects that use hydrogen instead of fossil fuels. Now, those grants are dormant, and the biggest erstwhile beneficiary of them, steel firm Cleveland Cliffs, is downbeat on hydrogen.
Meanwhile, DOE and Interior Department are giving favorable treatment to projects to develop the coal used for steelmaking.
Combating China
By all accounts, the steel sector is a key priority for Trump.
The industry suffered major losses over recent decades to imports from China and elsewhere. China currently produces more than half of global steel.
And while Cleveland Cliffs has idled some production recently and laid off hundreds of workers, the American steel sector is faring far better than the global competition. Over the past year, China, Germany, and other major steel producers have dropped production, according to the World Steel Association.
Trump says tariffs and deregulation are boosting domestic production and combating China.
“Steel production is rising in the U.S.,” he said at a Cabinet meeting last month, emphasizing the 50 percent tariffs on imported steel. “People are going to want to make steel here.”
Across the steel sector, leaders are praising Trump and Republican policies. Along with the tariffs, the sector is applauding tax cuts in the One Big Beautiful Bill Act, which include new bonus depreciation rules that are big perks for capital-intensive industries like steel — and the major deregulation moves.
“Those rules that were finalized during the Biden administration would impose very significant additional compliance costs,” said Kevin Dempsey, president of the American Iron and Steel Institute. “We work very closely with EPA. We engaged during the previous administration and made the case for why some of the regulatory mandates were not achievable.”
Dempsey said the energy sector is poised to drive demand for more steel. Electricity demand is set to skyrocket with new data center projects across the country, driving up the need for more power plants. Both the power plants and data centers require a lot of steel.
Data from S&P Global Commodity Insights shows steel prices have ticked up from much of last year but remain far below peaks in 2023.
The American steel industry is also quick to champion its environmental record, despite the pollution concerns from communities. Compared to the rest of the world, the U.S. produces steel with much lower greenhouse gas emissions.
That’s because the U.S. produces much of its finished steel with scrap in electric furnaces, removing the carbon-intensive ironmaking step of the manufacturing process. Steel-related CO2 emissions are gradually declining in the U.S., according to the think tank Climate TRACE.
And while environmentalists criticized the Trump administration for halting grants that could have commercialized steel made with hydrogen, which would dramatically reduce emissions, similar hydrogen-focused projects are also being shelved globally, particularly in Europe. ArcelorMittal canceled hydrogen plans in Germany earlier this year, citing high energy costs and lack of progress in hydrogen infrastructure.
“There’s been a realization that we need to moderate our enthusiasm on the hydrogen hype,” said Bell, president of the Steel Manufacturers Association. “The steel industry is in a good place. The Trump administration gets it.”
Reporter Sean Reilly contributed.
