Gold prices steady ahead of Fed decision; weekly weakness noted
Investing.com -- U.S. President Donald Trump declared an upcoming increase in tariffs on steel imports, doubling down on his trade war strategy. The tariffs are set to jump from 25% to 50%, a move aimed at bolstering the American steel industry. This announcement was made during a Pennsylvania rally, where Trump reiterated his commitment to further securing the U.S. steel sector.
As expected, U.S. aluminum and steel shares are surging in premarket Monday trade on the news. Among the notable gainers, Cleveland-Cliffs Inc (NYSE:CLF) rose over 25%, Nucor Corp (NYSE:NUE) climbed 11%, and Steel Dynamics Inc (NASDAQ:STLD) added 5.9%.
The tariff hike is designed to support the Nippon-United States Steel (NYSE:X) deal, which Trump highlighted as a significant investment in the U.S. steel industry. He detailed that Nippon Steel Corporation plans to invest $2.2 billion in the Mon Valley Works and an additional $7 billion to modernize steel mills, expand ore mines, and construct cutting-edge facilities across Indiana, Minnesota, Alabama, and Arkansas. According to Trump, this investment will generate and preserve over 100,000 American jobs.
Trump emphasized the magnitude of the Nippon deal, calling it a "record-setting" $14 billion commitment to the future of the company and the largest investment of its kind in Pennsylvania’s history. He assured that the deal includes essential protections for steelworkers, ensuring job security, the continuation of operations at all U.S. facilities, and a forthcoming $5,000 bonus for every U.S. Steel worker.
At the event, the United Steelworkers President referred to the Nippon-US Steel Deal as a "merger".
In related news, BMO Capital Markets analyst Katja Jancic upgraded Nucor to Outperform from Market Perform, citing valuation, while downgrading Algoma Central Corporation (TSX:ALC) to Market Perform from Outperform, noting it is “a relative tariff loser.”
“Nucor is executing on a multi-year organic growth plan that should over time support higher through-cycle profitability and FCF,” Jancic wrote in a client note.
(Senad Karaahmetovic contributed to this report.)