Nippon Steel expects FY 2025 net profit to sink 43% on tariff woes
The Japanese steelmaker, which has been facing hurdles in its plan to acquire U.S. Steel Corp., said its net profit for fiscal 2024, which ended this March, fell 36.2 percent to 350.23 billion yen as inflation dampened demand for its products and the Chinese economy slowed down.
President Tadashi Imai voiced caution at a press conference in Tokyo, saying he does not expect conditions to improve this business year and that it is "extremely difficult to read the effects of U.S. tariffs, as the tariffs themselves change from day to day."
In March, Trump enacted 25 percent tariffs on aluminum and steel imports. While the Japanese government has been seeking the full removal of the levies alongside so-called reciprocal tariffs and those on cars, Washington has rejected the requests.
"We have a lot of hope for the Japanese government, and hope that it will continue negotiations without compromise for as long as it takes," Imai said.
Regarding the U.S. Steel buyout plan, the company largely declined to comment after U.S. President Donald Trump last month directed the Committee on Foreign Investment in the United States to submit a recommendation on the deal within 45 days.
"Our starting point to make (the U.S. steelmaker) our subsidiary has not changed. We are currently in negotiations with the U.S. government and are unable to talk about the details, but our basic stance remains unchanged," Imai said.
Trump has set a June 5 deadline for the recommendation and is expected to make a decision within 15 days of receiving the proposal. While welcoming investment in U.S. Steel, he has consistently expressed opposition to Japanese ownership.
Executive Vice President Takahiro Mori, who also joined the press conference, said Nippon Steel would "endeavor to conclude things there."
In December 2023, Nippon Steel and U.S. Steel announced that the Japanese firm would acquire its U.S. counterpart for $14.1 billion and make it a wholly owned subsidiary.
But the companies have struggled to secure approval from the U.S. government. Former U.S. President Joe Biden issued an order in January to block the sale on national security grounds, which prompted the Japanese and U.S. steelmakers to initially file a lawsuit.
Nippon Steel's operating profit for the just-ended business year decreased 29.6 percent to 547.96 billion yen, with sales down 1.9 percent at 8.70 trillion yen.
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