President Donald Trump is to impose steep tariffs on steel and aluminium imports next week, hitting producers like Canada and China.
He said steel products face a 25% tariff, with 10% on aluminium goods.
The US imports four times more steel than it exports, and is reliant on steel from more than 100 nations.
Mr Trump tweeted that the US was suffering from "unfair trade". But the move has hit US markets, with the Dow Jones index closing down 1.7%.
The value of shares in American steel manufacturers jumped significantly after the announcement.
The news is likely to provoke an angry reaction from China, and analysts have expressed fears of the prospect of new trade wars.
Key US allies are also at risk of being hit with higher costs, but it is not clear if any countries will be excluded from the new measures.
Why now?
During his presidential campaign, Mr Trump said that foreign countries were "dumping vast amounts of steel all over the United States, which essentially is killing our steelworkers and steel companies".
And since taking office, Mr Trump said cheap imports from China were harming the viability of industry in the US, which is the world's biggest importer of steel.