By Global financial markets responded sharply to President Donald Trump’s announcement of doubling tariffs on imported steel and aluminum from 25% to 50%, effective June 4. The move aims to bolster the domestic steel industry but has intensified trade tensions with key international partners.
U.S. steelmakers experienced significant stock gains following the announcement. Cleveland-Cliffs Inc. (NYSE: CLF) spearheaded the rally with a 25% jump in its share price, followed closely by notable gains from Nucor Corp. (NYSE: NUE) and Steel Dynamics Inc. (NASDAQ: STLD) rose nearly 10% each. These gains reflect investor optimism about the potential benefits of the increased tariffs for domestic steel manufacturers.
At a rally in Pennsylvania, former President Donald Trump doubled down on his pledge to rejuvenate America’s steel sector, vowing to return Pittsburgh to its storied status as “the Steel City.” He took aim at substandard foreign steel—particularly from China—and underscored the need to shield domestic jobs and industries from overseas threats.
The European Commission expressed concerns over the escalating trade tensions and plans to engage in discussions with U.S. officials to negotiate tariff reductions. The current tariffs on EU steel and cars stand at 25%, with a provisional goods tariff paused at 10% during ongoing talks.
While the increased tariffs have been welcomed by U.S. steel producers, they have raised concerns among industries reliant on steel, such as automotive manufacturers. Companies like General Motors and Ford experienced stock declines of 3.9% and 3.9%, respectively, due to fears of rising production costs.
Cleveland-Cliffs CEO Lourenco Goncalves has been a vocal advocate for tariffs, asserting that they can play a crucial role in reestablishing the U.S. as a manufacturing powerhouse. The company, being a fully integrated steel producer with operations spanning from mining to manufacturing, stands to benefit significantly from the protective measures.
As the global trade landscape continues to evolve, the long-term impacts of these tariffs on various sectors remain to be seen. However, the immediate effect has been a notable boost in investor confidence in U.S. steel stocks.