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The new two and three-year accords are for industry-standard sheet steel, according to a person familiar with the matter, who asked not to be identified because the details haven't been publicly disclosed. General Motors Co. is one of the carmakers to agree to a multiyear pact, according to another person familiar with the matter.
While it's unclear what prices were agreed to, the duration of the agreements mark a notable change for Cliffs, the biggest supplier of automotive steel in the US, whose previous automotive contracts were usually signed in one-year increments.
Shares of the Cleveland-based steelmaker surged as much as 3.9% after the Bloomberg report. The stock traded 1% higher as of 1:17 p.m. in New York.
The move is a hedge for both parties. It indicates some automakers are solidifying multiyear prices of key steel input for their cars and trucks amid widespread concern that President Donald Trump's tariffs will stoke inflation. It also shows that Cliffs, which has lost auto market share in recent years, is trying to capitalize on Trump's steel sector duties.
Trump imposed 25% tariffs on US imports of foreign steel in March, and then increased the levy to 50% in June. Trump contends tariffs will help protect US jobs and encourage companies to invest more in the country, as well as raise government revenue. But many economists say tariffs will hurt growth as higher prices for goods put a squeeze on household budgets. Trump's broad-reaching tariffs policy — which includes sector-specific and country-level duties — are widely expected to push up vehicle prices by thousands of dollars.
Automakers are now taking the chance to lock in a fixed steel price as tariff costs risk sapping demand for new cars. While some companies have indicated they may raise consumer prices in the second half of the year, they are also constrained by the fear of losing market share to competitors with a bigger domestic footprint and lower costs.
It wasn't immediately clear which carmakers entered into the longer-term supply agreements. Cliffs' position makes it one of the most important suppliers to GM, Ford Motor Co. and Stellantis NV.
A Cleveland-Cliffs spokeswoman declined to comment.
GM had no immediate comment. Stellantis didn't respond to a request for comment. Ford declined to comment.
Detroit automakers are particularly flummoxed that the Trump administration has negotiated trade deals with Japan, South Korea, and the European Union without hammering out accords with neighboring Canada and Mexico, saying the agreements put them at a disadvantage to foreign competitors.
US automakers face billions of dollars in tariff exposure from Trump's duties on imported cars and parts as well as those on steel, aluminum and other goods.
Ford has said Trump's tariffs on steel and aluminum are impacting the company, namely through price increases from its suppliers that purchase the raw materials. It expects a net $2 billion hit from tariffs this year.
Canada is the biggest foreign supplier of steel to the US, accounting for about 23% of American imports in 2024, according to US government data.
--With assistance from Keith Naughton.
(Adds shaeres in fourth paragraph.)
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