U.S. Metal Stocks Hold Losses as Exemptions Blunt Tariff Boost

(Bloomberg) — After fluctuating in the past week amid uncertainty over planned tariffs, U.S. steel and aluminum stocks barely moved as President Donald Trump finally announced the measures.

U.S. Steel Corp., AK Steel Holding Corp. and Nucor Corp (NYSE:). held losses Thursday as Trump confirmed a 25 percent duty on steel shipments and 10 percent on aluminum, while giving conditional exemptions to Canada and Mexico.

Those steel stocks surged a week ago when news of the tariff plans emerged, before swinging between gains and losses amid fears that retaliatory measures and exemptions to allies would water down the benefits. Century Aluminum Co. recovered some ground Thursday as Trump said the Chicago-based company would bring back capacity, before falling back to close down 7.5 percent.

The president signed a formal proclamation for the tariffs, excluding Mexico and Canada as long as they renegotiate the North American Free Trade Agreement. The measure gives Trump the flexibility to raise tariffs on other countries if the two Nafta partners are excluded long term.

Earlier Thursday, Trump noted that the U.S. has a trade surplus with Australia and called the nation a “long-term partner.”

For aluminum, such exemptions would render the tariffs useless by thwarting the ability of U.S. smelters to restart capacity, according to Harbor Intelligence.

Senator Jeff Flake said he’s incredulous about confusing signals from the White House on how it might proceed with the tariff proposal: “Flexible tariffs? What does that mean? One day you wake up and say, ‘I don’t like Australia?’ It’s unbelievable.”

The Arizona Republican plans to introduce legislation that would nullify the tariffs.

Trump announced the planned tariffs on March 1, after a Commerce Department investigation found that imports of the metals pose a risk to national security. The probes were authorized under the seldom-used Section 232 of the 1962 Trade Expansion Act that gives the president broad powers to impose trade restrictions on domestic security grounds.

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