(Bloomberg) -- U.S. Steel Corp. led declines by American producers of the metal as the government said it will shield a list of allies from import tariffs, eroding the benefits to domestic mills.
U.S. Steel slumped 8.9 percent at 3:08 p.m. in New York, while AK Steel Holding Corp. and top U.S. iron-ore producer Cleveland-Cliffs Inc. lost more than 7 percent. Chicago-based Century Aluminum Co. tumbled 17 percent.
“People want to believe tariffs are good for U.S. steelmakers, on the other side of the coin they see exemptions and potential for demand uncertainty due to supply disruptions,” Phil Gibbs, an analyst at Keybanc Capital Markets, said by telephone. “Now there's exemptions unfolding and the gap is enormous. There's only one place for prices to go and that's down.”
The U.S. will “pause the imposition” of steel and aluminum tariffs that take effect Friday for Europe, Australia, South Korea, Argentina and Brazil, U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee on Thursday. Brazilian steelmakers Cia. Siderurgica Nacional SA and Usinas Siderurgicas de Minas Gerais SA rallied.
Trump announced earlier this month he was imposing a 25 percent tariff on imported steel and 10 percent on aluminum but exempted Canada and Mexico as long as they agreed to an updated North American Free Trade Agreement.
He also left the door open for allies to negotiate their own exemptions, sparking a furious lobbying effort by trading partners like the European Union, which is threatening retaliation if it's hit by the duties.
To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net.
To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Steven Frank
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