Traders Brush Off Trump as Steel's Tariff-Fueled Gains Evaporate

(Bloomberg) -- President Donald Trump said his tariffs on steel imports will help domestic manufacturers. Judging from the companies’ stock performance, investors are skeptical.

Shares of U.S. Steel Corp. slipped in eight of the past nine days, erasing all the gains since Commerce Secretary Wilbur Ross recommended the levies to Trump. Nucor Corp. is heading for its second weekly decline as an 11 percent rally in mid-February lost steam.

The NYSE Arca Steel Index slipped 0.6 percent as of 10 a.m. in New York, poised for the lowest level in a month.

The weakness contrasts with buoyant comments from the companies themselves as U.S. Steel raised its full-year forecast while Nucor chief executive officer John Ferriola said Trump’s steel tariff will help strengthen the industry.

Blame it on the policy itself, according to Goldman Sachs Group Inc. While the 25 percent levy on imported steel is aimed at raising the competitiveness of domestic firms, a growing list of exemptions undercuts the benefit.

“Much ado about nothing?” Goldman analysts wrote in a note to clients. “The situation remains fluid and we believe the list of exempted countries could potentially grow longer. For example, Australia is no longer subject to the tariffs and South Korea is applying for an exemption. Markets have reacted accordingly.”

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net.

To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Scott Schnipper

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