U.S. steelmakers’ shares jump after Trump hikes industry tariffs to 50%

Steel stocks in the United States experienced a significant surge on Monday following President Trump’s announcement to double tariffs on steel and aluminum. Cleveland-Cliffs, a prominent steel manufacturer, saw a remarkable 25.2% increase in early morning trading. Additionally, Nucor Corp. and Steel Dynamics, two major players in the steel industry, also witnessed a 10% rise before the markets opened.

President Trump’s decision to increase tariffs from 25% to 50% came on the heels of his previous announcement in February under Section 232 of the Trade Expansion Act of 1962. This authority allows the president to impose restrictions on imports that are deemed a national security threat. The new tariffs are set to take effect on June 4, causing a ripple effect in global markets.

In response to the heightened tariffs, the European Union announced its preparation of “countermeasures” against the United States. The trading bloc is currently engaged in negotiations with the U.S. and has shown a willingness to strike a deal to alleviate tensions.

President Trump also revealed plans for a strategic partnership between U.S. Steel and Nippon Steel, a Japanese competitor. The $14 billion deal aims to create at least 70,000 jobs and ensure that steel production remains in America for years to come. However, specific details about the partnership are still forthcoming.

While steel stocks soared, equity markets experienced mixed results on Monday as investors grappled with uncertainty surrounding the administration’s tariff policy. Last week, the Court of International Trade intervened to block tariffs imposed by the Trump administration on China, Mexico, and Canada, leading to market volatility.

Despite the legal challenges, the administration’s tariffs, including those on steel and aluminum, remain in effect. The trade court’s lawsuit does not impact tariffs implemented under Section 232, leaving the industry in a state of flux.

Overall, the steel industry’s reaction to President Trump’s tariff announcement underscores the complex interplay between global trade policies and market dynamics. As negotiations continue and trade tensions evolve, stakeholders in the steel sector will remain vigilant to navigate the shifting landscape.