Nippon Steel expects net profit to slide 43% in the fiscal year ending March 2026, it said on Friday, citing a weak global steel market pressured by China’s exports and the impact of new US tariffs.

Japan’s biggest steelmaker also said it expects a US decision on whether to approve the company’s proposed acquisition of US Steel by June 5.

Nippon Steel forecast net profit for the year through March 31, 2026 would fall to 200 billion yen ($1.4 billion), after reporting on Friday that profit fell 36% in the year ended March 2025 to 350.2 billion yen.

“Excess production and increased exports from China, driven by a widening supply-demand gap amid the economic slowdown, show no signs of easing, and this difficult environment is expected to persist through the current fiscal year,” President Tadashi Imai told a news conference.

“The indirect impact of the US tariffs on our earnings could be significant,” he added, while noting that direct effects will be limited as exports to the US are small and consist of mainly hard-to-substitute products.