Let Freedom Ring Must Reads

Trump’s Trade Policies: Will We See US Steel Versus Apple?
By Mark O'Hara

Trump’s trade policies

The Trump administration is investigating whether steel imports are threatening US national security. A similar probe is also being carried out for aluminum imports. If the United States decides to levy import duties on all steel imports, it could be a real game changer for US steel companies such as United States Steel (X). For a long time, US steel companies have been asking for a level playing field to eliminate what they call unfairly traded steel products, which have been a challenge for the US steel industry.

 Trump’s Trade Policies: Will We See US Steel Versus Apple?

Steel imports

The US steel industry has definitely been impacted by cheap imports. In 2015, many steel companies had to curtail production when US steel prices plummeted. United States Steel and AK Steel (AKS) reported losses amid these falling steel prices. However, the losses were not limited to just US steel companies. Steel companies around the world found it hard to make money with lower steel prices.

But the situation is very different now. Steel Dynamics and Nucor (NUE) had high profits in 1Q17. Although United States Steel reported a net loss, it was mostly due to company-specific factors rather than lower steel prices.

Technology companies

If the Trump administration takes a tougher stance against steel and aluminum imports, US steel and aluminum producers could benefit. But we should also consider the impact on other sectors and a backlash from some of their trading partners. For instance, technology giants (QQQ) (NDX-INDEX) such as Apple (AAPL) count China among their major markets.

 

Share This Article
Stay Informed
Sign up to stay informed with our newsletters and breaking news alerts.
Previous Must Read Article
06/02/2017 | Ethan Barton
Next Must Read Article
06/09/2017 | Colin A. Hanna

Comments are closed here.