On Thursday, July 13, steel socks increased after Donald Trump disclosed that he is considering quotas and tariffs on steel imports to the United States. Following the news, shares of U.S. Steel traded 3.5% higher, while AK Steel increased more than 5.5%.
“There are two ways – quotas and tariffs. Maybe I’ll do both,” Trump said Wednesday evening, according to snippets of his conversation with reporters on Air Force One. The full transcription was made available to the public this afternoon.
“Not only China, but others. We’re like a dumping ground [for steel], okay?” Trump said. “They’re dumping steel and destroying our steel industry, they’ve been doing it for decades, and I’m stopping it. It’ll stop.”
There were a number of analysts on Wall Street that upgraded the steel stocks in anticipation of favorable policy. According to Jim Strugger of MKM Partners, “President Trump’s comments today about quotas and tariffs on steel and the positive response across steel stocks suggests more upside ahead when an official announcement is made by the Commerce Department.” He added, “We’re suggesting that clients get long or longer here.” Additionally, on Wednesday, Strugger noted in a report to clients that MKM was seeing unexpected bullish activity in options for stocks such as AK Steel.
Keep in mind that the United States government hasn’t made an official announcement on steel tariffs yet. Towards the end of April, Trump told the Commerce Department to look into whether steel dumping poses a threat to U.S. national security. That report has since been delayed, and the steel sector is still waiting for an official decision.
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