Callum Keown and Al Root

Steel stocks surged Monday after President Donald Trump promised to impose 25% tariffs on imports of steel and aluminum, another volley in the administration's so-called trade war.

The levies will apply to all countries exporting the metals to the U.S., Trump told reporters on Sunday en route to Super Bowl LIX in New Orleans. Trump said he would announce the new tariffs on Monday, along with what he described as reciprocal tariffs on Tuesday or Wednesday on countries that have imposed levies on U.S.-made goods.

These tariffs follow 10% levies announced on China -- which has announced its own retaliatory tariffs on some products imported from the U.S. -- and 25% levies on Canada and Mexico, which have been delayed.

The proposed steel and aluminum tariffs would make it harder for overseas companies to sell lower-priced steel on the U.S. market, supporting domestic producers. U.S. steel makers could also hike their prices as a result.

Shares of Cleveland-Cliffs jumped 18% on Monday to $11.84 apiece, while Nucor stock added 5.6% at $137.53. Steel Dynamics stock gained 4.9% at $132.87. Shares of aluminum producers Alcoa and Century Aluminum were up 2.2% and 10.2%, respectively.

Shares of United States Steel rose 4.8% to $38.70. That rise helps offset Friday's 5.8% loss that came after Trump said that Nippon Steel would invest in U.S. Steel instead of buying it.

Nippon has been trying to acquire U.S. Steel for $55 a share. The deal faced stiff political opposition, with President Joe Biden blocking it in January. Nippon declined to comment on the president's remarks.

Shares of German steel producers Thyssenkrupp and Salzgitter opened sharply lower before paring losses in early European trading. Thyssen stock added 1% in overseas trading. Salzgitter shares fell 1.4%.

The S&P 500 and Dow Jones Industrial Average rose about 0.7% and 0.4%, respectively.

Benchmark steel prices have risen about $60 a ton to roughly $750 since late January. That's still below the $1,000-$1,500 range a ton from 2021 to 2022, when steel-company profits were much higher. Many factors influence steel prices, such as a weak manufacturing economy and imports.

Tariffs as a means of helping the domestic steel business have been tried several times in the recent past. President George W. Bush put in place tariffs between 2002 and 2003. In 2018, Trump initiated tariffs also. Several countries, including Canada and Mexico, received exemptions from the levies. Biden imposed tariffs on a range of Chinese products, including steel, in 2024.

The lasting impact of tariffs on the industry is challenging to determine. Steel stocks have performed well over the past five years, but that starting point is close to Covid-19-related lows.

Baird machinery analyst Mig Dobre wrote Sunday that steel accounts for about 20% of the cost of heavy machinery. Companies tend to add surcharges for higher metal prices, passing them on to customers. "The 2018 tariff resulted in price increases in the 4%-to-6% range as a result."

Trump is using tariffs as a negotiating tactic with other countries. In the case of China, it has led to a ramping up of trade tensions between the world's two largest economies.

Earlier today, China's retaliatory tariffs against the U.S. came into effect. Beijing announced the levies last week, including a 15% tax on U.S. imports of coal and liquefied natural gas, in response to Trump's additional 10% tariffs on Chinese goods.

And while they were postponed, Trump's 25% tariffs on Mexico and Canada could soon come back into focus. Trump agreed to delay the taxes by 30 days after both countries agreed to reinforce their borders with the U.S. But Trump told Fox News on Sunday that Canada's and Mexico's actions were "not good enough."

-- Janet H. Cho contributed to this report.

Write to Callum Keown at callum.keown@dowjones.com and Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 10, 2025 17:16 ET (22:16 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.