Meet the Street: Steel's Last-Minute Pardon
The battered U.S. steel industry got a much-needed reprieve from President Bush on Tuesday when he imposed tariffs ranging from 8% to 30% on steel imports over the next three years. The tariffs are designed to help save a domestic industry that has seen 28 bankruptcies in the past four years and competes with a glut of steel supply across the globe.
American Express Financial Advisors
Recent Meet the Streets
Peter R. Hartley
Glen J. Buco
Clay Hoes, a senior analyst with American Express Financial Advisors, says these tariffs most likely will benefit smaller steel manufacturers, known as the mini-mills, as well as other steel companies that are struggling the most. And even though the U.S. steel industry has been through a great deal of turmoil in recent years, Hoes believes these tariffs will embolden it to raise prices.
These tariffs should allow U.S. steelmakers to raise prices, but their customers in the automotive and construction industries should take heart, Hoes is quick to add. That's because the tariffs and higher prices should guarantee that their steel suppliers will remain in business, at least in the near term, he says.
Read on for more of Hoes' take on the new tariffs.TSC: Which U.S. steel manufacturers stand to benefit the most from these new steel import tariffs? Hoes: Hard to say who wouldn't. They're all going to benefit. But the ones that are the marginal producers, which would include Bethlehem Steel (BS) and Wheeling-Pittsburgh Steel (WHX), are the ones that benefit the most because they are close to bankruptcy. Because this is a resuscitating event, they will participate on the upside much more than a U.S. Steel (X) would.
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