Feb 11, 2025 (Baystreet.ca via COMTEX) --
A week after planning to impose 25% tariffs on Mexico and Canada, U.S. President Trump announced a flat 25% tariff on steel and aluminum imports. This move is an attempt to help struggling domestic industries.
This tariff is without exceptions or exemptions. In response to the news, Alcoa (AA) gained 2.2%, Cleveland-Cliffs (CLF) added 17.93%, and United States Steel (X) gained 4.65%.
Automotive Industry Suffers
The chances are high that the automotive industry will suffer from those tariffs. The sector is already trying to find a trough in the business cycle. Consumers are buying fewer vehicles since they find the higher prices unappealing. The higher metal prices would hurt their profits.
Watch out for General Motors (GM), Stellantis (STLA), and Ford Motor (F). Their shares may continue a downtrend, breaking down to new 52-week lows.
The housing sector may face higher costs. PulteGroup (PHM) and D.R. Horton (DHI) are homebuilders whose stocks are trading near the low for the year.
Canada (EWC), Brazil (EWZ), and Mexico (EWW) are the biggest exports of steel to the U.S. South Korea and Vietnam also have meaningful export volumes. Companies in those countries will suffer. Their corresponding ETFs, which track their index, may underperform as well.
In Canada, Algoma Steel (ASTL) shares traded slightly lower.
COMTEX_462684899/2559/2025-02-11T09:42:31
