With few details revealed about President Donald Trump's plan to impose tariffs on steel and aluminum imports, industrial companies are working to assess how it could affect them.
The president said Thursday that he is looking to impose a global 25% tariff on steel imports and a 10% tariff on aluminum imports. Trump did not publicly elaborate on whether these tariffs would be applied broadly or just to a select group of countries, but the New York Times reported that Trump told a group of executives at a White House meeting that he did not want any nation to be exempt from the order.
"We're going to rebuild our steel industry. We're going to rebuild our aluminum industry," Trump said Tuesday during a press meeting with executives of the aluminum and steel industries. "The U.S. hasn't been treated fairly. Next week, we'll be imposing tariffs on steel imports and aluminum imports."
U.S. equities tumbled Thursday after the announcement, with Dow dropping by more than 500 points during the afternoon trading session. The market sell-off persisted into Friday's morning trading session as the president's tariff crusade continued on Twitter.
U.S. aerospace giant Boeing Co. (BA) , which uses aluminum and steel in its aircraft fleet, and said they did not have a statement to provide at this time, but will keep assessing the announcement. Shares of Boeing fell by 1.4%, closing at $344.67 on Friday.
Similarly, construction machinery and equipment company Caterpillar Inc. (CAT) didn't provide a response. Caterpillar stock dropped about 2.6% to close at $146.38.
We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!— Donald J. Trump (@realDonaldTrump) March 2, 2018
Honeywell International Co. (HON) , which is a holding in TheStreet founder Jim Cramer's Action Alerts PLUS Charitable Trust, did not provide a statement on the tariff announcement. Shares of the diversified industrial giant, which uses steel in various products, including steel security safes, rebounded during the afternoon trading session, rising 0.6% to $148.14 at the close.
Cramer and the AAP team believe the earlier weakness in the stock was overblown, "especially as the company hosted its annual investor conference on Wednesday where we viewed the company's value creation story as very much alive."
Fellow AAP holding Arconic Inc. (ARNC) , a manufacturer of lightweight metals, including aluminum, directed TheStreet to the Aluminum Association for comment. The organization issued a statement Thursday, saying: "We appreciate the President's commitment to strengthening the U.S. aluminum industry. We look forward to working with the President on implementation and to creating a more level playing field."
Notably, Arconic's Mark Vrablec, president of Aerospace and Automotive Products, sits on the Aluminum Association's board of directors. Shares of Arconic fell 0.5% to $23.91.
Boston-based General Electric Co. (GE) did not provide a statement. GE stock rose 0.7% to close at $14.12.
Prior to the tariff announcement, however, Chief Executive John Flannery addressed trade and tariffs in his annual letter to investors.
"As a global multinational with operations in more than 180 countries that sells more than 60% of what we make to customers abroad, we disfavor barriers to trade, investment, and the movement of people," Flannery wrote. "At the same time, in an increasingly protectionist world, our global footprint becomes more and more of a singular asset. GE will continue to be a strong voice in support of free trade and robust international competition."
To be sure, the details of the plan to impose tariffs "do not appear to have been finalized, so while action seems likely, many aspects of the decision could change over the next week," Goldman Sachs' Chief Economist Jan Hatzius said in a March 1 research note.