Steel producer stocks rallied Monday, to buck the selloff in the broader stock market, after President Donald Trump said he was bringing back tariffs on steel imports from Brazil and Argentina, as retaliation for currency devaluations.
Shares of AK Steel Holding Corp. AKS, +4.71% ran up 4.7% to a four-month high, U.S. Steel Corp X, +4.19% rose 4.2% and Nucor Corp. NUE, +0.50% advanced 0.5%.
Steel Dynamics Inc.’s stock STLD, +1.25% gained 1.3%, Commercial Metals Co. CMC, +1.40% rose 1.4% and TimkenSteel Corp. TMST, +4.12% tacked on 4.1%.
The gains were a silver lining for investors, as the tariffs helped trigger a market selloff, with the Dow Jones Industrial Average dropping 268 points, or 1.0%, the S&P 500 index losing 0.9% and the Nasdaq Composite Index falling 1.1%. See Market Snapshot.
Trump tweeted that the tariffs were “effective immediately,” and were a response to the “massive devaluation” of currencies which hurt U.S. farmers. Brazil’s real has fallen more than 9% against the U.S. dollar over the past year, while Argentina’s peso has tumbled 59%.
Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries. The Federal….
— Donald J. Trump (@realDonaldTrump) December 2, 2019
Both Brazil and Argentina had received exemptions from the 25% tariffs on steel imports imposed in 2018. The reinstated tariffs come as the U.S. and China appear to be struggling to finalize the first phase of a trade deal.
Analyst Tyler Kenyon cautioned that investors shouldn’t view the tariffs as a game changer for steel makers, given the small