Steel stocks jump after Trump teases plans for 25% tariffs on steel and aluminum
China dominates the global steel market, even if it’s not the top exporter to the US directly.
Speaking to reporters aboard Air Force One on Sunday, President Trump revealed his latest trade tirade — this time, aiming to protect the symbolic US steel industry, with 25% tariffs expected to be imposed on all imports of steel and aluminum into the United States.
The news sparked a bid for America’s largest steel stocks. Indeed, the best performer in the S&P 500 Index this morning is Nucor, which has jumped 8% in early trading. Steel Dynamics is not far behind, currently up 6%, and US Steel is up 4%.
Though details are still light, the proposal would hit Canada and Mexico again — two neighbors that have already been threatened with tariffs by the new US administration. For Canada specifically, this is a potential blow, as data compiled by Bloomberg reveals that it’s the top exporter to the US for both steel ($11.2 billion) and aluminum ($9.5 billion). Mexico is second for steel ($6.5 billion) and third for aluminum ($686 million).
Whether China, which sold ~$5 billion worth of steel and ~$500 million of aluminum to the US last year, would face double tariffs (Trump already announced a 10% levy on Chinese goods) is unclear.
But while China may not directly export much of these metals to the US, its supply has flooded the global industry.
Per estimates from the USGS, China produced some 990 million metric tons of steel last year — more than 12x what the United States made and roughly half of the entire global production. Per The New York Times, China is at the center of the tariffs on steel and aluminum, with its low-cost metal putting downward pressure on global prices.
