US Steel is tumbling after Trump does a 180 on trade (X)


Manuel Balce Ceneta/AP

President Donald Trump just did a 180 on trade with China, and steel stocks are under pressure.

US Steel is down 4.77% Monday after Trump touted his revised position on trade with China, announcing the US will put its tariffs on hold.

In March, Trump announced the US would place a 25% tariff on imported steel from China, and 10% tariff on imported aluminum.

"China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products - would be one of the best things to happen to our farmers in many years!"Trump tweeted.

The affirmative but vague repositioning on trade talks includes the US putting tariffs of $150 billion worth of Chinese imports on hold. China is promising to increase its imports of US agriculture and energy products. It previously said it would retaliate by putting tariffs on US agriculture products like soybeans.

It is not yet clear whether the White House intends to put steel and aluminum tariffs on hold, but steel stocks are getting hit on the assumption those tariffs may be postponed or canceled.

And US Steel Corporation shares seem to move directly in line with Trump's tariff announcements. US Steel spiked in early March when Trump announced tariffs on China, and one analyst told Business Insider the tariffs could make US Steel's operating income "laughably high."

The price of steel in the US has increased roughly 5%, since Trump's tariff announcement in early March. That's a direct result from the initial tariffs, according to UBS analyst Andreas Bokkenheuser. "A temporary drop in steel imports triggered by Section 232 has supported prices," he wrote in a note to clients.

"Potential trade deals with China will likely encourage steel imports once more - and, in turn, accelerate a US steel price correction, in our view," he said. "We advise caution on the US steel sector."

Nucor, another steel manufacturer in the US is also off slightly, just over 1%.

US Steel Corporation is down 5.84% on the year.

Markets Insider

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