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Trump claims of Chinese dumping lift US steel shares

Shares of US steel companies outperformed this week in anticipation that Donald Trump will impose tariffs after accusing China of dumping the metal in the US market.

This week’s rally in US steel companies, including AK Steel, a Pittsburgh-based producer, and US Steel, the largest domestically based steel producer, was given added impetus on Thursday after Mr Trump said his administration will take action.

Other countries are “dumping steel [in the US] and destroying our steel industry”, Mr Trump told reporters on Air Force One en route to Paris. “They’ve been doing it for decades and I’m stopping it. It’ll stop.”

The comments by Mr Trump were initially off the record and not reported by journalists travelling with the president, who was on his way to Paris to attend Bastille Day festivities.

However, the White House later changed the ground rules and released a transcript of his remarks, sparking the steel rally.

The White House is awaiting a US Department of Commerce report that will help determine whether Mr Trump can impose tariffs.

An end of June deadline for the report has slipped. Mr Trump said on Thursday that “there are two ways: quotas and tariffs. Maybe I’ll do both. We’re like a dumping ground, OK?”

Over the week, AK Steel rose 9.2 per cent to $6.50; US Steel jumped 8.3 per cent to $23.21; Nucor rose 2.6 per cent to $59.72 while Steel Dynamics climbed 1.8 per cent to $36.56.

Nonetheless, share prices in the sector remain off their peaks from earlier in the year as investors’ optimism over the Trump administration’s policy agenda has faded.

On Thursday, Wilbur Ross, commerce secretary, told members of the Senate Finance Committee that he would present Mr Trump with the options for potential action as early as next week.

Several agricultural lobby groups have signed a joint letter to Mr Ross claiming any restrictions on steel or aluminium imports could lead to other countries retaliating by restricting imports of agricultural products from the US.

“If the . . . investigations on steel and aluminium result in new trade barriers, the aftermath could be disastrous for the global trading system and for US agriculture in particular,” the letter read.

Mr Trump was asked on the flight whether he would use trade as a bargaining chip with China over its relationship with North Korea.

“The biggest strength we have are these horrendous trade deals, like with China,” he said. “That’s our strength. But we’re going to fix them. But in terms of North Korea, our strength is trade.”
 


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