Steel stocks soar after Trump resumes tariffs on Brazilian and Argentine steel imports

SMM12, April 4-President Trump said on Monday that he was resuming steel import tariffs on Brazil and Argentina in retaliation for currency depreciation, boosting U. S. steel stocks to rise on Monday.

However, analyst Taylor Kenyon (Tyler Kenyon) warned that given the small size of the Brazilian and Argentine markets, investors should not see tariffs as a key factor in improving the operations of steel mills. In fact, tariffs may ultimately be negative because they may lead to higher production costs.

"We believe that tariffs are a negligible boost for steel supplies and mills, where refined steel powder accounts for less than 4 per cent of imports," Kenyon wrote in a report to customers. " The duration of tariffs and their impact on other trade arbitrations and renegotiations are "key uncertainties", which could change the pattern of demand and trade in finished steel. If tariffs on Brazil are extended, the production costs of US slab rolling companies will be increased or increased in 2020. This puts production costs at a disadvantage compared with the rest of the world. If the tax rates on other foreign sources of US sheet supply are not adjusted accordingly, this could prompt more finished plates and plates to be imported back to the United States.

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