Steel stocks are getting whacked on optimism for US-EU trade
- 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 Monday, the Trump administration rolled out a multibillion dollar aid package for farmers and ranchers hurt by protectionism.