Trump signed a presidential memorandum for the Commerce Department to start the investigation under a little-used law, Section 232 of the Trade Expansion Act, which invokes national defense reasons to protect US production.
Its outcome could further impact China, Germany and other countries already complaining about stiff duties levied since February on certain steel exports to the US.
Trump said his "historic" order was part of a "fight for American workers and American-made steel."
He denied the step targeted China, which he had previously accused of being a currency "manipulator" before reversing course this month when calculations on reining in North Korea took precedence.
"This has nothing to do with China. This has to do with worldwide, what's happening. The dumping problem is a worldwide problem," Trump said.
He said the Commerce Department probe could be completed within 50 days, far quicker than the 270 days allotted under the law.
'Killing our steelworkers'
Commerce Secretary Wilbur Ross, in a separate briefing call with reporters, noted Trump's campaign statement that foreign companies were "dumping vast amounts of steel all over the United States, which essentially is killing our steelworkers and steel companies."
Steel imports, he said, had risen 19.6 percent in the first two months of this year and now represented more than a quarter of the steel available in the American market.
Section 232 calls for the Commerce Department to consult with the Pentagon before any recommendations are drawn up.
China makes more than half the world's steel but a slowdown in its economy and sagging global demand has left the industry with huge excess capacity.
Beijing in February accused Washington of protectionism for imposing duties ranging from 63 percent to 190 percent on its exporters accused of selling steel products at below fair value or of being unfairly subsidized.
Germany, too, complained in March about US duties on imports of steel plate products. It said the measure also unfairly disadvantaged suppliers in Austria, Belgium, France, Italy, Japan, South Korea and Taiwan.
Both China and Germany have said they are considering taking their challenges to the World Trade Organization.