The stock price of domestic steelmakers jumped Thursday after the Trump administration announced it would levy tariffs on imported steel.
President Donald Trump said the U.S. would impose a 25 percent duty on steel and a 10 percent duty on aluminum in an effort to restore balance with foreign steel-producing countries such as China.
The share prices of steelmakers such as Nucor Corp., AK Steel Holding Corp. and Steel Dynamics Inc. increased between 4 and 10 percent.
In a Thursday meeting at the White House, United States Steel Corp. President David Burritt said the taxes the U.S. was putting in place would be good for his company’s employees and customers.
“It’s time for some fairness here,” Burritt said. “It’s past time.”
Roger Newport, the CEO of AK Steel, agreed.
"We support and commend President Trump for announcing today the actions he plans to take to stem the tide of unfairly traded steel imports that threaten the national security of our country," Newport said. "This is a strong, important step to combat the effects of global steel overcapacity and address actions by other countries to circumvent U.S. trade laws and orders designed to ensure a level playing field."
But if U.S. steelmakers were cheering, industries that consume steel such as automakers, home builders and HVAC equipment manufacturers strongly criticized the decision.
The National Association of Home Builders said would-be homeowners will feel the effects of the new levies.
“These tariffs will translate into higher costs for consumers and U.S. businesses that use these products, including home builders,” said Randy Noel, NAHB chairman and a custom home builder from LaPlace, Louisiana. "Given that home builders are already grappling with 20 percent tariffs on Canadian softwood lumber and that the price of lumber and other key building materials are near record highs, this announcement by the president could not have come at a worse time.”
The Air-Conditioning, Heating, and Refrigeration Institute, which represents most of the major U.S. manufacturers of HVAC equipment, had lobbied against the tariffs. Association President and CEO Stephen Yurek said it was disappointed in the White House’s decision.
“As major users of steel and aluminum, we have been proactive in explaining to the administration that the HVACR and water heating industry would be negatively impacted by an increase in tariffs, as would the consumers that rely on the products we manufacture,” Yurek said. “While we have been pleased with the Trump administration’s enthusiastic support for manufacturing, we believe this step to be injurious, rather than helpful, to our efforts to increase American manufacturing and create jobs.”
In announcing the tariffs, the White House said protecting America’s steel and aluminum producers from unfair competition was an issue of national security, since the materials would be vital in times of war.
The Canadian government, which says it buys more American steel than any other country, issued a strongly worded rebuttal after the tariffs were announced.
“It is entirely inappropriate to view any trade with Canada as a national security threat to the United States,” Canadian Foreign Affairs Minister Chrystia Freeland said in a statement. “We will always stand up for Canadian workers and Canadian businesses.”
Canada may be forced to retaliate with its own tariffs, she added.
“Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers,” Freeland said.
The stock market ended trading Thursday down 420 points as investors feared the tariffs could be the beginning of a trade war.
In a Twitter post Friday morning, the president said he wasn’t concerned about retaliation from America’s trading partners.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted.