Market Overview

Trump's Comments On Steel, Aluminum Tariffs Shake The Markets

Share:
Trump's Comments On Steel, Aluminum Tariffs Shake The Markets
Related SPY
This Day In Market History: Robert Brennan Fined For Securities Fraud
The Market In 5 Minutes: Walgreens To Replace GE In The Dow Jones Industrial Average
Bi-Weekly Economic Review (Seeking Alpha)
Related DIA
Why GE's Removal From The Dow Could Help Investors
The Original Dow Jones Industrial Average: Where Are They Now?
Bi-Weekly Economic Review (Seeking Alpha)

Steel and aluminum stocks are popping on Thursday while the rest of the market crashes after President Donald Trump said he will be announcing new steel and aluminum tariffs as early as next week.

What You Need To Know

Trump said Thursday the U.S. will implement a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, but didn't specify whether the tariffs will be applied to all imports or just imports from specific countries.

“People have no idea how badly our country has been treated by other countries,” Trump said. “By people representing up who didn’t have a clue.”

The Dow Jones Industrial Average fell more than 500 points Thursday afternoon, sitting around the 24,500 level at time of publication. The S&P 500 slid about 43 points.

Why It’s Important

The new metal tariffs are on the high end of what some analysts expected after the U.S. Commerce Department recommended a 24-percent tariff earlier this month. Back in January, Trump imposed a 30 percent tariff on imported panels, most of which are coming from Asia.

China, which is the largest international U.S. trade partner, is a major importer of both steel and solar panels. Politicians in both the EU and China have already threatened to retaliate against the U.S. if Trump implements import tariffs.

The EU has said it's prepared to act “swiftly and appropriately” to restrictive U.S. trade measures by potentially implementing its own restrictions on U.S. exports such as bourbon, cheese, orange juice tomatoes and potatoes. EU officials could also reportedly target iconic American brands, such as Harley-Davidson Inc (NYSE: HOG).

China is also reportedly already prepping for a trade war, investigating the possibility of restricting U.S. grain imports.

What’s Next

Investors will now be watching and waiting for further details on the new tariffs and any indication the market sell-off could soften Trump’s stance.

In the meantime, Height Securities said on Thursday the steel tariffs are great news for U.S. steel stocks, potentially providing support for domestic prices and increasing profitability.

“It is possible that Trump could use this meeting to confirm his commitment to taking strong action, especially on steel tariffs, and we expect that headlines will be positive for the affected steel companies,” Height said prior to Trump's announcement.

Here’s a rundown of how steel and aluminum stocks reacted to the news on Thursday:

  • United States Steel Corporation (NYSE: X) was up 7.6 percent.
  • Steel Dynamics, Inc. (NASDAQ: STLD) was up 4.2 percent.
  • AK Steel Holding Corporation (NYSE: AKS) was up 10.9 percent.
  • Alcoa Corp (NYSE: AA) was up 1.7 percent.
  • Nucor Corporation (NYSE: NUE) was up 2.4 percent.

Related Links:

Analysts Break Down The Sec. 232 Steel Investigation

Analyst: Steel Investors Need Action From Trump, Not Words

Image credit: Sgt. Alicia Brand - here, Public Domain, via Wikimedia Commons

Posted-In: Analyst Color Government News Regulations Commodities Politics Top Stories Markets Best of Benzinga

 

Related Articles (AA + AKS)

View Comments and Join the Discussion!