For the first time in more than a quarter-century, the United States has muscled past Japan in steel production — a symbolic and economic milestone fueled by President Donald Trump’s aggressive tariff regime and a surging appetite for steel from America’s booming artificial intelligence buildout, Nikkei Asia reports.

U.S. crude steel output climbed 3.1% in 2025 to 82 million tons, according to the World Steel Association, vaulting the U.S. into third place globally behind only China and India.

It marked the first time since 1999 that American mills outproduced Japan, ending decades of relative decline and signaling a dramatic shift in the global steel landscape.

The revival has Trump’s fingerprints all over it.

In March, his administration imposed an additional 25% tariff on imported steel and aluminum, then doubled down in June by lifting the levy to 50%. With foreign steel suddenly far more expensive — and availability less certain — U.S. manufacturers ramped up output to meet rising domestic demand.

Steel prices have surged as a result. Hot-rolled steel coils, a key input for manufacturing and construction, hit $983 per ton as of Jan. 12, the highest level since last May and nearly double the global export price, according to SteelBenchmarker. Prices are up roughly 30% from January 2025, when Trump began his second term.

Yet higher prices have not scared buyers away — including foreign ones.

Instead, tariffs have created a protected, high-margin market where steelmakers can invest with confidence. U.S. domestic steel shipments rose 5% year on year in November, data from the American Iron and Steel Institute show, underscoring the strength of underlying demand.

A major driver is the AI boom. Steel demand for data centers and power generation facilities has surged as tech companies race to build the infrastructure needed to support artificial intelligence.

Private-sector spending on data center construction more than doubled in the two years through January 2025, according to the U.S. Department of Commerce, turning the sector into a critical pillar of steel consumption.

Foreign investors are taking notice. Japan’s Nippon Steel completed its $14.1 billion acquisition of U.S. Steel last June and plans to pour billions more into American operations to mass-produce high-grade steel tailored for data centers and other advanced applications.

With tariffs shielding the market and demand accelerating, the U.S. has become one of the most attractive steel investment destinations in the world.

Deal activity is accelerating in anticipation of continued growth. On Jan. 6, U.S. electric arc furnace producer Steel Dynamics teamed up with Australia’s SGH to propose a 13.2 billion Australian dollar ($9.13 billion) acquisition of BlueScope Steel.

The bid targets BlueScope’s North American assets, including an Ohio mill with 3.5 million tons of annual capacity and strong exposure to automotive and construction markets.

Steel Dynamics — the fourth-largest steelmaker in the U.S. and second only to Nucor in electric arc furnace output — has built its competitive edge on tightly integrated domestic recycling, production and logistics.

BlueScope’s board rejected the initial offer as undervaluing the company, but analysts expect the bidders to return with a higher price.

While capital floods into the U.S., conditions elsewhere are deteriorating. China, which accounts for roughly one-third of global steel consumption, is seeing demand slump amid a prolonged construction downturn.

Excess Chinese steel — often sold at deeply discounted prices — is flooding export markets, distorting global prices and squeezing producers in export-dependent countries.

“The direction of steel market conditions is diverging sharply,” said Atsushi Yamaguchi, a senior analyst at SMBC Nikko Securities. “Regions that restrict imports through protectionist measures are seeing investment and profitability improve, while other regions face intensifying pressure.”

Yamaguchi warned that steelmakers in Japan, South Korea, Taiwan and China — all heavily reliant on exports — will see their profit environment worsen further after 2026 as market polarization deepens.

In contrast, the U.S. steel industry is enjoying a rare moment of resurgence — protected by tariffs, powered by AI-driven demand and buoyed by a wave of domestic and foreign investment that has reshaped the global steel hierarchy.