- US Steel spiked Thursday after reports suggested President Donald Trump is ready to impose tariffs on imported steel and aluminium.
- A tweet from Trump Thursday morning appeared to show his support for tariffs.
- Shares gained last week after a Bloomberg News report said Trump favoured the strongest of three tariff options.
Shares of US Steel surged as much as 4.2% in early trading Thursday after Bloomberg’s Jennifer Jacobs and Joe Deaux reported late Wednesday the president told aides he wants tariffs, or a tax on imports, of 25% for steel and 10% for aluminium. There could be exceptions for certain countries, according to the report.
Thurs morning, Trump appeared to signal he would sign into law the tariffs he was reportedly considering last week.
“Our Steel and Aluminium industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world,” he tweeted. “We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!”
The move is designed to spur support and jobs in manufacturing rich states, home to many of the country’s largest metals producers, including US Steel and aluminium giant Alcoa. Kentucky-based Century Aluminium will likely rehire some 350 workers to bring its plant back back to full production capacity from the current two-fifths levels if new tariffs spur demand as promised, CEO Michael Bless told Reuters this month.
But the move could also increase tensions between the US and countries from which it imports steel and aluminium, especially China, whose steel production skyrocketed from just 127.2 million tons in 2000 to 806.7 million in 2016, according to the World Steel Association.
Raising steel tariffs is something “other countries could easily follow,” Nomura analyst Jordan Rochester said in a note to clients in February. It would be an action that no country has crossed since World War II, opening the way to a trade war.”
Shares of US Steel are up 9.62% over the past year.