Steel & Aluminum

President Trump has pledged to impose 25% tariffs on all steel and aluminum imports, though it’s unclear when the tariffs will take effect. He also stated that no foreign country should control U.S. Steel (X) but encouraged Nippon Steel, a Japanese steelmaker, to invest in the company. This is said considering the Biden administration’s recent actions halting the purchase of U.S. Steel by Nippon. Steel imports have fallen 35% over the past decade, in part due to Trump’s previous tariffs. Aluminum imports, however, have risen 14%, with Canada supplying about 70% of U.S. raw aluminum needs. Markets reacted Monday morning with domestic steel and aluminum companies like Cleveland-Cliffs (CLF), Nucor (NUE), and Alcoa Corp (AA) experiencing early gains.

As markets continue to experience some volatility due to trade negotiations, it’s important to recall how trading based on headlines can be perilous. Markets quickly price-in new information and generally react much faster than individual investors can. As negotiations unfold, markets will continually incorporate new information into prices. That’s why investors should spread risk, maintain quality holdings, and be patient.

The opinions expressed herein reflect the opinions of Linden Thomas Advisory Services, LLC (LTAS), and are subject to change without notice. Past performance is no guarantee for future results. The securities referenced in the article are not a solicitation or recommendation to buy, sell or hold securities. Upon request, free of charge, LTAS can provide a list of all portfolio holdings held in its portfolio for the past year.”