Trump has lit a flame under the steel space.
U.S. steelmakers rose on Monday's trading session on reports that President Donald Trump wants to impose new tariffs on imports of aluminum and steel.
United States Steel (X) rose 85 cents, or 1.95%, to $44.37 after Bloomberg reported that the President wants to impose a 24% tariff on imports of steel.
Action Alerts Plus holding Nucor Corp. (NUE) gained 94 cents, or 1.4%, to $67.88, while Steel Dynamics (STLD) Inc. rose 55 cents, or 1.16%, to $48.02. AK Steel Holding Corp. (AKS) advanced 15 cents, 2.73% to $5.65.
The call for new tariffs may be a move to endorse the suggestions of Commerce Secretary Wilbur Ross, who conducted research into the effects of steel prices and imports on national security, the Financial Times reported.
Ross's recommendations included imposing a global tariff of "at least" 24% on imports of steel and 7.7% on aluminum. Trump said last year the impetus of Ross's probe was not to punish China, but to show that the U.S. economy and military needs access to domestically produced steel in case a war develops that requires a major build-up in war-making material.
This morning, Axios reported that Trump would actually prefer a 25% tariff on steel, on the grounds that 25% is a "rounder number" than 24%.
The tariff talk comes as Trump has withdrawn from the TPP agreement among Pacific Ocean nations and as he threatened to withdraw from the North American Free Trade Agreement, which binds the U.S., Canada and Mexico.
Besides suggesting the new tariffs, Ross also asked Trump to consider targeting certain countries with even higher tariffs, and cutting the amount of steel coming into the U.S. by 37% from all countries, CNN reported.
For steel, Ross told Trump he also has the option to raise tariffs to 53% on imports from 12 counties: Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey and Vietnam.
These countries would not be allowed to export more steel to the United States this year than they did last year, CNN said.
However, what's good for steelmakers isn't so good for manufacturers that depend on steel, for example the automakers and makers of machinery like Caterpillar (CAT) earth-moving equipment. Shares of Caterpillar, Ford (F) and GM (GM) all fell last week, but rallied today.