When the latest round of steel and aluminum tariffs went into effect in early March, U.S. steelmakers wasted no time raising prices. According to BloombergNEF, prices jumped by $129 per ton, a bump that, if captured as pure profit, could amount to billions of dollars in additional revenue for companies like U.S. Steel and Cleveland-Cliffs.

At Industrious Labs, we set out to answer a simple question: Could this new stream of tariff-driven profit fund the clean energy transition in steel? The answer—based on a high-level analysis—is yes. In fact, it could be done in just about a year.

What Would It Cost to Clean Up?

The steel sector is one of the most polluting industries in the U.S.. But there are proven, scalable solutions already in play. The leading alternative to coal-based blast furnace steelmaking is Direct Reduced Iron (DRI) paired with Electric Arc Furnaces (EAFs), which can be powered by green hydrogen and renewable electricity. This pathway eliminates coal entirely and significantly reduces pollution and greenhouse gas emissions.

According to recent estimates, it costs approximately $2 billion to build or convert a facility to be hydrogen-ready DRI-EAF. So the question became: how long would it take U.S. Steel and Cleveland-Cliffs to earn $2 billion in profit from the new $129/ton price hike?

We used publicly available production data for U.S. Steel and Cleveland-Cliffs across 2023 and 2024. We assumed the full $129/ton increase is profit, based on the fact that the product hasn’t changed, only the price. Here’s what we found:

• Cleveland-Cliffs produces an average of 1.335 million net tons of steel per month, which—at a $129/ton price increase—translates to about $172 million in additional monthly profit. At that rate, the company could generate $2 billion in just 11.6 months, enough to cover the cost of transitioning one of its coal-based furnaces to clean, hydrogen-ready steelmaking.
• U.S. Steel, meanwhile, produces around 1.238 million net tons per month, generating roughly $160 million in monthly profit from the same price hike. That puts it on track to reach $2 billion in just 12.5 months.

These figures suggest that both companies could generate enough tariff-driven profit to fund a new clean steel mill in approximately one year.

Chart: Cleveland-Cliffs and U.S. Steel could fully fund the cost of a green hydrogen-powered DRI-EAF facility in just over a year using profits from U.S. steel tariffs.

Tariffs, Layoffs, and the Race to Modernize the U.S. Steel Industry

This comes at a turning point for the steel industry. Earlier this month, Cleveland-Cliffs announced plans to idle its aging Dearborn Works plant and lay off 600 workers starting in July. Meanwhile, Hyundai announced a $6 billion investment in a new U.S. steel mill in Louisiana that’s expected to create over 1,300 jobs using coal-free DRI-EAF technology.

The contrast is clear: one company continuing to rely on aging, coal-based technology; the other investing in more modern, coal-free methods that lay the groundwork for a cleaner future.

The stakes go far beyond corporate competition. This is about jobs, health, and climate. According to our recent report, coal-based steelmaking is a major source of climate and air pollution, responsible for an estimated 892 premature deaths annually in the U.S.

While this analysis is intentionally simplified, it offers a powerful takeaway: Tariff windfalls are more than enough to fund the transition. The only real question is whether legacy steelmakers will use this moment to invest in the future or cling to the past while competitors move ahead.