Japan's steel industry has expressed "deep respect" for the government's efforts in securing a trade deal with Washington that lowers reciprocal tariffs to 15pc from the previously imposed 25pc, assuaging concerns of further declines in domestic steel demand, particularly from the auto sector.
The deal is extremely significant not only for the steel industry but for Japan's broader industrial sector. "We would like to express our deep respect to the Japanese government for its efforts to date," the chairman of industry group the Japan Iron and Steel Federation (JISF) Tadashi Imai said in the statement released on 23 July. The majority of exports from Japan to the US are made up of products that use a lot of steel, such as automobiles and automobile parts, industrial machinery, and electrical machinery, he added.
The revised tariff arrangement follows negotiations between Tokyo and Washington, resulting in Japan securing a 15pc reciprocal tariff on exports to the US, a notable reduction from the blanket 25pc levy previously imposed.
The Japanese steel industry had voiced concerns over the US' blanket 25pc levy on auto imports as it would likely cap the Japanese car exports to the US. Japan delivered around 1.4mn units of passenger vehicles to the US market in 2024, according to Japanese customs data.
A potential reduction in auto deliveries to the US could have weighed on Japanese steel output, given that around a quarter of domestic steel demand comes from the auto industry, according to the country's trade and industry (Meti) data.
"Ahead of other countries, Japan has succeeded in achieving lower tariffs on automobile and auto parts," Japanese prime minister Shigeru Ishiba said on 23 July.
Meanwhile, the US' sweeping 50pc tariff on steel products imports appears to remain in effect. Negotiations on this front are ongoing, JISF said. JISF hopes that the government will "negotiate tenaciously" with the US, it said. The Japanese government has not yet fully disclosed the details about the trade deal.
But the blanket 50pc tariff imposed by the US on steel imports is unlikely to have a significant impact on domestic crude steel output, at least until September, a Meti official told Argus. This is largely because many of the Japanese steel products imported by US customers cannot be easily replaced with domestic products, the Meti official said.
The trade breakthrough comes at a critical time for Japan's steelmakers, who are grappling with persistently weak domestic demand.
The country's crude steel output fell on the year by 4.4pc to 6.7mn t in June, according to JISF, marking the third consecutive month of year-on-year declines. Output in June is consistent with the downtrend in domestic steel demand, a representative from JISF's statistics division told Argus. There has been no major change in the structure of domestic steel demand, they said.
The outlook remains subdued especially because the country's second largest steel mill JFE temporarily closed one of its basic oxygen furnaces (BOF) on 8 July, citing weak steel demand in both domestic and overseas markets.
| Japanese ferrous output | 000t | ||||
| Jun '25 | May '25 | Jun '24 | m-o-m ± % | y-o-y ± % | |
| Crude steel production | |||||
| Ordinary steel | 5,169 | 5,303 | 5,480 | -2.5 | -5.7 |
| Specialty steel | 1,549 | 1,530 | 1,542 | 1.2 | 0.4 |
| Total crude production | 6,718 | 6,833 | 7,024 | -1.7 | -4.4 |
| Crude steel production method | |||||
| Basic oxygen furnace | 4,823 | 5,074 | 5,125 | -4.9 | -5.9 |
| Electric arc furnace | 1,895 | 1,759 | 1,897 | 7.7 | -0.3 |
| Pig iron | |||||
| Total production | 4,759 | 4,960 | 5,049 | -4.1 | -5.7 |
| *Based on preliminary data | |||||
| — Japan Iron and Steel federation | |||||
