Despite President Donald Trump’s efforts to prop up American steel companies with tariffs, steel company stocks are down, with U.S. Steel seeing a 57 percent drop since Trump’s tariffs were announced in March.
As Charlie Bilello, director of research for New York-based Pension Partners, pointed out on Twitter this week, U.S. Steel's stock price has collapsed by more than 50 percent since early March, when Trump announced plans to place new taxes on imported steel. Since the tariffs were officially implemented on June 1, U.S. Steel has seen its stock price fall from $37 to less than $21 at noon on Wednesday. The current price represents a 17-month low.
While Trump’s trade moves are just one factor involved in stock prices, the steep fall off casts doubt on whether the president’s tariffs can produce the results he has promised:
Still, the dramatic fall of U.S. Steel's value in the eyes of investors raises questions about the benefits of Trump's attempt to boost American steelmakers at the expense of America's steel-consuming industries, which are forced to pay higher prices due to tariffs.
In other words, if Trump...believes it is necessary to force automakers like Ford to pay $1 billion annuallyin tariff-related costs in order to benefit American steelmakers, shouldn't the benefits of that policy outweigh the costs?
America’s top five steel producers have all seen their stock prices fall, Reason noted.
"Of the 13 stocks in the S&P 1500 steel sub index, all but one are down year to date by an average of nearly 25 percent," Barron's notes this week, adding that the real problem facing all these companies is that "steel is very much a global market. The U.S. is 'short' steel. Even with domestic mills running at about 80% of capacity the U.S. needs to import about 30 million tons of steel."
Part of the problem is that American companies have to import steel — the U.S. simply doesn’t produce enough on its own to meet the demand.
Trump has claimed his trade policy is fueling several new steel plants across the U.S., but the facts do not bear out such a claim.
Despite Trump's repeated assertions (which have now earned him a "bottomless Pinocchio" from The Washington Post's fact-checkers), there are not seven or eight new steel plants being built across the country. There's not even one—unless you count U.S. Steel making some upgrades to its main facility in Gary, Indiana, but that's hardly what Trump claimed the tariffs would accomplish.