Steel Stocks Drop on Trump’s New Tariff Imposition on Imports

Shares of steel and aluminum declined on Monday as Trump put a new blanket tariff of 25% on all steel and aluminium imports. The move sends shockwaves across the world, as metal shares plummet in India.

At 9:50 AM, Nifty Metal was the worst performer on the NSE, losing 2.7% at 8,348. The main steel players had to suffer with Vedanta down 4.4%, SAIL by 4%, Tata Steel down 3.27%, Jindal Steel off 2.9%, JSW Steel fell 2.8%, and Hindalco lost 2.49%. National Aluminium Company (Nalco) dropped 2.5%.

Other metal companies such as NMDC, Hindustan Copper, Jindal Stainless, Welspun Corporation, APL Apollo Tubes, Adani Enterprises, and Ratnamani Metals also fell between 0.2% and 2.5%. The broader NSE Nifty index was off by 130 points or 0.55%.

Trump also threatened further retaliatory tariffs, to be announced in the middle of the week, promising to equalize tariffs that other countries imposed on U.S. exports. The stakes of a global trade war have just been raised, especially after China’s measures about the goods from the U.S. kicked in.

Impact on Global Trade Relations:

Trump’s tariff plans come amid ongoing tensions with key U.S. trade partners. Canada, Brazil, Mexico, South Korea, and Vietnam are the leading suppliers of steel and aluminum to the U.S., according to trade data. His latest move revives concerns over strained relations, especially with Canada and Mexico, who previously faced similar threats over trade and immigration policies.

During his presidency, Trump had initially imposed a 25% duty on steel and 10% on aluminum imports from Canada, Mexico, and the EU. While a subsequent agreement lifted these tariffs for Canada and Mexico, European steel exports remained subject to U.S. duties until 2021.

Steel Market Trends:

Still, the global steel market is under pressure, as China’s export hot-rolled coil prices remained unchanged in December after a 6% decline in November. Prices in North Europe, Japan, and the U.S. slid 1%, 2%, and 5% respectively, month-on-month. The prices of HRC as well as primary long products in India posted a decline of 3% in December and further dropped by 1% by mid-January.

As Trump’s latest tariff decision unfolds, industry experts warn of further volatility in global steel markets.