European steel stocks dip as US firms gain on Trump's tariff plans
Major European steel giants saw their share prices falter on Tuesday afternoon, as investors continue to weigh the impact of US President Donald Trump's plan to double steel and aluminium tariffs from 25% to 50%, with the latter set to take effect from 4 June.
The announcement has escalated trade tensions and drawn significant criticism from worldwide trade partners. Trump, meanwhile, claims the move will make the US steel industry even stronger.
He said in a post on his social media platform Truth Social: 'Our steel and aluminum industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers. MAKE AMERICA GREAT AGAIN!'
German steel company Thyssenkrupp's share price declined 0.5% on Tuesday afternoon on the Frankfurt Stock Exchange. Salzgitter AG's share price also declined on the exchange, by 0.4%.
Following the trend, ArcelorMittal SA's stock dipped 1.1% on the Euronext Amsterdam exchange on Tuesday afternoon, while Austrian steel company Voestalpine AG's share price declined 0.8% on the Vienna Stock Exchange.
On the other side of the Atlantic, however, major US steel companies such as Cleveland-Cliffs, Nucor, and Steel Dynamics saw their share prices surge on Monday.
Cleveland-Cliffs' share price closed 23.2% higher, whereas Nucor's share price jumped 10.1%. Steel Dynamics' share price also closed higher, up 10.3% on Monday.
The unpredictability of recent US tariffs continues to pose considerable risks to US businesses, despite Trump's reassurances that tariffs will benefit the economy. This is mainly because several US companies with international operations could be forced to scramble to find alternative foreign suppliers and customers.
It is also remains unclear how long steel and aluminium tariffs could stay at the 50% level proposed, as Trump continues to negotiate other tariffs with various countries.
Felix Tintelnot, professor of economics at Duke University, told TIME: 'We're talking about expansion of capacity of heavy industry that comes with significant upfront investments, and no business leader should take heavy upfront investments if they don't believe that the same policy [will be] there two, three, or four years from now.
'Regardless of whether you're in favour [of] or against these tariffs, you don't want the President to just set tax rates arbitrarily, sort of by Executive Order all the time,' he added.
Tintelnot also highlighted that increasing the price of aluminium, which is a very common input material in several sectors such as automotive and construction, would, in turn, hurt those industries, even if there may be some advantages to the domestic US steel and aluminium sectors.
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