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Steel Stocks In Focus: Trump Announces Sweeping 25% Tariffs On Steel, Aluminium Imports In Latest Trade Escalation
US Tariffs On Steel
Shares of steel and aluminum companies, including Tata Steel, JSW Steel and Hindalco, declined up to 4% per cent on Monday following US President Donald Trump’s announcement of a 25 per cent tariff on all steel and aluminum imports.
Other names like Steel Authority of India, Vedanta, NMDC, NALCO and Jindal Steel were also down 3-4 percent. The Nifty Metal index also tanked over 2 percent, making it the worst hit sectoral index.
NMDC, Hindustan Copper, Jindal Stainless, Welspun Corporation, APL Apollo Tubes, Adani Enterprises, and Ratnamani Metals were trading with losses in the range of 0.2 per cent to 2.5 per cent. By comparison, the NSE Nifty index was quoting 130 points (0.55 per cent) weak.
Trump also stated that he will announce reciprocal tariffs on Tuesday or Wednesday, applying them to all countries and matching the tariff rates each country imposes.
This move heightens concerns about a global trade war, with China’s retaliatory duties on U.S. goods set to take effect on Monday.
Last week, Trump initiated a trade war by first imposing tariffs on Mexico and Canada, then temporarily suspending them, but maintaining duties on Chinese goods. This prompted a measured response from Beijing, hinting at the possibility for negotiations.
Who Are Top Steel Suppliers To The US?
As of now, Canada – which Trump had previously threatened with tariffs – was the largest source of steel and aluminium imports to the US, followed by Brazil, Mexico, South Korea and Vietnam, according to US trade data. This latest policy threatens to once again ignite tensions with the American neighbours.
Earlier this month, both Canada and Mexico faced similar threats when Trump threatened to impose a 25 per cent import duty on their products due to illegal immigration concerns. However, he later postponed that plan for 30 days, until early March, following discussions with the leaders of both countries.
During his first term, Trump imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum imports from Canada, Mexico, and the European Union.
A year later, the U.S. reached an agreement with Canada and Mexico to lift those tariffs, though the EU import taxes remained in place until 2021, according to reports.
Meanwhile, China’s hot-rolled coil (HRC) export prices remained flat month-on-month (MoM) in December, following a 6 per cent decline in November. Steel prices in North Europe, Japan, and the U.S. dropped by around 1 per cent, 2 per cent, and 5 per cent MoM, respectively.
In India, primary long product prices and HRC prices both fell by 3 per cent MoM in December.
By mid-January, HRC and primary long product prices were both down around 1 per cent compared to the December average.
