Stocks of major U.S. steel companies jumped Monday after President Trump announced he would double tariffs on steel and aluminum.
Cleveland-Cliffs steel manufacturer was up 25.2% in early morning trading. Nucor Corp., one of the nation’s largest steel manufacturers, and Steel Dynamics, a steel producer and metals recycler, were both up 10%.
The surge in steel stocks followed an announcement by Mr. Trump on Friday that he would double tariffs on steel and aluminum from the current rate of 25% to 50%. The 25% tariffs, announced in February, were enacted under Section 232 of the Trade Expansion Act of 1962, which gives the president authority to restrict imports he deems a national security threat. The new 50% tariffs are slated to take effect on June 4.
The spike in U.S. steel tariffs is sparking concern that consumers could see prices hikes on big-ticket products, such as cars, houses and large appliances. Experts warn that grocery prices also could rise given how widely the material is used in packaging for canned goods.
Steel and aluminum prices jumped Monday, according to Bloomberg. Automakers, which rely on steel and aluminum to produce vehicles, suffered early losses on Monday, with Ford shares falling 3.7% and General Motors dropping 4.1%.
Robert Budway, president of trade group Can Manufacturers, told The Associated Press that manufacturers have become increasingly reliant on imported metals and that as prices climb, the cost is “levied upon millions of American families.”
EU says it will hit back
The European Union on Monday said it is preparing “countermeasures” against the United States in response to Mr. Trump’s higher tariff announcement which has roiled global markets. The 27-country trading bloc is currently in negotiations with the U.S. and has demonstrated that it is eager to strike a deal.
Mr. Trump in May announced a “planned partnership” between U.S. Steel and its Japanese competitor Nippon Steel. Few details have emerged about what exactly the $14 billion deal will look like, although the White House has said it will create “at least 70,000 jobs” and that it will “ensure steel is made in America for decades to come.”
Equity markets were not faring well early Monday. Stocks were mixed in early trading as investors continue to wrestle with uncertainty as a result of the Trump administration’s on-again, off-again tariff policy.
The markets experienced heightened volatility last week after the Court of International Trade on Wednesday sued to block tariffs imposed by the Trump administration on China, Mexico and Canada.
Stock initially jumped Thursday after the decision was announced, but ultimately finished lower on Friday after a federal appeals court in Washington, D.C., temporarily suspended the trade court’s decision.
As the legal battle unfolds, the administration’s levies remain in place. The trade court’s lawsuit does not affect tariffs introduced under Section 232, which include the steel and aluminum tariffs.
contributed to this report.
