Watch CBS News

Steel companies benefiting from Trump's tariffs

Factory workers lose jobs amid steel tariffs
Factory workers lose jobs as steel tariffs put business in "crisis mode" 01:21

President Donald Trump's imposition of steel and aluminum tariffs, along with his broader trade policy, have raised concerns in companies ranging from automakers to tech giants. But one U.S. industry is starting to see benefits from the turn toward protectionism: steelmakers.

The 25 percent tariffs imposed by the U.S. on steel imports this spring were "widely applauded by domestic steelmakers, having stifled imports, boosted production and elevated prices," Jefferies analyst Seth Rosenfeld wrote in an August 10 report.

Steelmakers expect the bridle on imports to hold and steel prices to stay higher. In the U.S., prices may peak in the third quarter, according to a recent IHS Markit forecast as demand for the metal remains robust globally.

Of a Bloomberg rolling list of 48 companies mentioning tariffs during the the quarterly earnings season, seven said they were benefitting -- most of those from the steel tariffs.

Executives with steel giant Nucor credited tariffs for higher prices and demand. 

"The tariffs send a clear message that the U.S. is done asking nicely for compliance with the rules of trade and is serious about demanding changes in the trade practices of other countries," Nucor CEO John Ferriola said in a call with investors in July. 

U.S. Steel, also boosted by rising prices, is restarting its Granite City, Illinois operations, including one announced after the tariffs were imposed. And rising global demand, combined with higher prices from the tariffs, is also helping the world's biggest steelmaker, AcelorMittal, based in Luxembourg. The company reported its biggest profit in seven years helped by higher production prices at the company's U.S. plants. Global demand is also climbing, according to a company presentation

Harley Davidson outsourcing some motorcycle production to avoid tariffs 05:39

Not everyone is cheering. Companies seeking an exemption to the tariffs on imported steel are accusing American steelmakers of spreading inaccurate and misleading information, fearing it may torpedo their requests, according to the Associated Press. 

Fears of a spreading global conflict over trade also could scare investors away.

"Trump trade policy has given the industry unprecedented energy, but talk of an expanding trade war may leave investors on the sidelines and steel equities unjustifiably cheap," Rosenfeld wrote.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.