Goldman Sachs is touting the shares of Nucor Corp. (NUE)   , Steel Dynamics Inc. (STLD)  and three other mining companies as it begins coverage of the North America Metals and Mining sector, calling it an attractive investment almost two weeks after President Donald Trump announced tariffs on steel and aluminum imports.

Mills are expanding in the U.S. "with explicit government policy support," even though China still dominates the global steel industry, Goldman Sachs analysts, including Matthew Korn, wrote in a March 19 research note.

Trump surprised many of his advisers when he signaled his intention to impose tariffs of 25% on imported steel and 10% on aluminum. The tariffs are still being negotiated and haven't gone into effect. 

"Commodity prices are high, the supply side for metals and bulks looks more rational than it has been in years, [metals and mining] balance sheets are healthy (or at least healthier), and consumption has momentum from coordinated global growth, even as China gradually slows," the Goldman analysts wrote.

Charlotte, North Carolina-based Nucor is the heavyweight among North American steel mills, the firm said.

"We believe that NUE can continue to exploit its strong balance sheet and market position to gain share and deliver earnings growth to at least the level currently expected by the Street," the Goldman analysts said.

Nucor, which is a holding in Jim Cramer's Action Alerts PLUS charitable trust portfolio, is expected to report sales of $22.9 billion for the fiscal year 2018 along with Ebitda of about $3.33 billion, according to FactSet Research Systems Inc.

Cramer and the AAP team recently noted that management said average selling prices for all steel mill product groups have increased each month in 2018, and they expect this momentum to continue into the second quarter as well.

"We expect Nucor's earnings will continue to improve now that President Trump has imposed a 25% tariff on steel imports as this decree has leveled the playing field for the U.S. industry," Cramer and the AAP team wrote in a March 16 note to subscribers. "With Nucor being the largest producer in the country, we expect both the demand and prices for its goods to increase."

Goldman sees 17% upside for Nucor. The firm has a Buy rating on the stock with a $78 price target. Nucor shares fell 1.2% to $64.50 at 2 p.m. New York time.

Fort Wayne, Indiana-based Steel Dynamics, meanwhile, has 26% upside potential, Goldman said.

"Steel Dynamics' steadily expanding profitability through pricing cycles, robust financial health, proven ability to leverage acquisitions, and low operational risks are all positive attributes among the [metals and mining] sector, in our view," the analysts said.

The firm has a Buy rating on the stock with a price target of $59. Shares of Steel Dynamics fell 0.8% to $45.30.

Goldman is also positive on mining giant Freeport-McMoRan Inc. (FCX)  , citing the company's new growth investments in the Americas. The Phoenix-based company also offers "the highest exposure to copper for which we see the most upside pricing risk," Goldman analysts said.

Freeport-McMoRan shares rose 2.1% to $18.42. The firm has a $23 price target on the stock. 

In addition to Nucor, Steel Dynamics and Freeport-McMoRan, Goldman put a Buy rating on steel manufacturing and scrap metal recycling company Schnitzer Steel Industries Inc. (SCHN) and aluminum processor Constellium N.V. (CSTM) .

The latter appears "poised to harvest benefits from investments in high-end, auto-focused sheet capacity," Goldman said. Schnitzer Steel, meanwhile, is ahead of plan on profitability and volume guidance and has the capacity to keep building volumes, the firm said.

Constellium shares rose 0.2% to $11.82 while Schnitzer Steel shares climbed 1% to $34.35.

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