Trump’s Tariff Announcement Boosts U.S. Steel and Aluminum Stocks

Cleveland-Cliffs Surges 12% as Alcoa Gains 3% Amid Tariff Speculation

U.S. steel and aluminum stocks surged on February 10, following President Donald Trump’s announcement of plans to impose a 25% tariff on imported steel and aluminum products. This move sparked strong investor interest in domestic metal manufacturers, driving significant gains in the New York Stock Exchange.

By 10:40 a.m. Eastern Time, shares of Cleveland-Cliffs, a major U.S. steel producer, had soared by 12% compared to the previous trading session. Other steel companies also experienced notable gains, with Nucor rising 6% and U.S. Steel climbing 5%. Aluminum giant Alcoa saw its shares increase by 3% during intraday trading, reflecting investor optimism about the potential benefits of the proposed tariffs for domestic producers.

Trump made the tariff announcement while speaking to reporters aboard Air Force One, stating that the formal plan to implement a 25% tariff on all steel and aluminum imports would be unveiled on February 10. The president’s proposal has reignited discussions about the potential impacts on both domestic manufacturing and international trade relations.

While imported steel accounts for a relatively small portion of total U.S. steel consumption, certain specialty steels used in aerospace, automotive, and energy sectors heavily rely on imports. According to Bloomberg, this dependence on foreign specialty steel could lead to mixed outcomes, with some domestic producers benefiting from reduced competition while industries reliant on specific materials may face higher costs.

In the case of aluminum, the situation is even more complex. Although the U.S. relies heavily on aluminum imports, the overall impact of the proposed tariffs on domestic profitability remains uncertain. A report from Morgan Stanley indicates that more than 80% of U.S. aluminum demand in 2023 was met through imports, primarily from countries like Canada, the United Arab Emirates, and Mexico.

Dominic O’Kane, an analyst at JPMorgan Chase, noted that existing aluminum stockpiles could temporarily buffer the U.S. market from immediate price shocks. However, he warned that in the medium term, reduced demand and increased domestic supply might exert downward pressure on aluminum prices. This dynamic could potentially offset some of the intended protective effects of the tariffs, creating a complex environment for both producers and consumers.

As the market reacts to Trump’s tariff proposal, investors and industry experts alike are closely monitoring developments to assess the long-term implications for the U.S. steel and aluminum sectors. The potential for shifts in supply chains, price volatility, and trade relationships will likely shape the strategic decisions of companies and policymakers in the months ahead.