Trump trade: Steel stocks are getting whacked on optimism for US-EU

Sean
Gallup/Getty

• Steel stocks were down early Thursday.
• In an Oval Office meeting Wednesday, President Donald
  Trump and the European Commission President Jean-Claude Juncker
  agreed to work toward “zero” tariffs.
• Prices of steel have been buoyed by a 25% tariff on the
  metal. 

Steel stocks fell Thursday after President Donald Trump suggested
he would backpedal in a trade face-off with the European Union
that has sent prices of the metal soaring.

The US and European Union won’t move forward with any additional
duties on one another and will work toward “zero tariffs,” Trump
said following a meeting with European Commission President
Jean-Claude Juncker on Wednesday.

“While we are working on this, we will not go against the spirit
of this agreement unless either party terminates the
negotiation,” he said in
a joint press conference with Juncker. “We also will resolve
the steel and aluminum tariff issues, and we will resolve
retaliatory tariffs.”

Here’s the scoreboard:

US Steel
Corporation: -5.78%

Nucor:
-1.66%

Steel
Dynamics: -2.76%

As part of broader efforts to rearrange global-trade
relationships, the Trump administration announced tariffs of 25%
on steel and a 10% on aluminum in March. The European Union,
Canada, and Mexico were initially shielded from metal tariffs,
but those exemptions expired in May.

The US has since been in a faceoff with its allies and other
major trading partners, who have imposed billions of dollars
worth of tariffs on American products.

As supply concerns send domestic prices of the metal soaring,
steel workers have welcomed the tariffs. Trump is on Thursday

visiting Granite City Works, an Illinois plant owned by US
Steel that announced last month tariffs allowed it to increase
production.

But winners from the trade war have been few and far between,
especially in the Midwest. The president’s visit to the region
will come against a backdrop of embattled companies that are
facing financial strain as tariffs raise costs and lower access
to foreign markets. 

Several companies, including General Motors and Harley Davidson,
cited trade policy concerns as they dimmed their 2018 outlooks in
financial reports out this week. On Tuesday, the Trump
administration rolled out a multibillion dollar aid package for
farmers and ranchers hurt by protectionism.