US steel stocks soar as 50% import duty raises inflation fears and rattles global supply chains
President Donald Trump’s surprise move to double tariffs on steel imports—from 25% to 50%—has triggered global shockwaves, fuelling a surge in US steel prices while intensifying pressure on struggling producers and buyers across Europe and Asia.
The tariffs, announced Friday at a rally in Pennsylvania and due to take effect Wednesday, are already reshaping trade flows. US steelmakers such as Cleveland-Cliffs, Steel Dynamics and Nucor jumped sharply on Monday—by 22%, 13%, and 12% respectively—on expectations that reduced import competition will enable further price increases. The VanEck Steel ETF (SLX) gained more than 3%.
“This was an absolute surprise,” said Josh Spoores, head of steel Americas analysis at CRU. “Already steel prices in the US are higher than anywhere else… all this does is raise prices there.”
The White House says the move aims to “further secure the steel industry in the United States” and ties in with a newly announced US$14bn investment agreement between US Steel and Japan’s Nippon Steel. Trump has promised no job losses and has referred to the deal as a “partnership” that will create 70,000 jobs, despite previously criticising foreign ownership of US steel assets.
Impact on Europe: relief for buyers, pain for producers
While US manufacturers now face rising input costs, European steel buyers could benefit as global steel is redirected from the US to alternative markets. Analysts expect the oversupply to push European prices lower, particularly in construction, automotive and appliance sectors.
“Some manufacturers in Europe might do better building products that are steel intensive at home and exporting them to the US as prices rise there,” said Spoores.
But the picture is more complex for European producers. Kaye Ayub of UK-based consultancy MEPS International warned that steel demand in Europe is already low, and further price declines could “erode domestic steelmakers’ profit margins,” forcing more plant closures. “Even with trade defence measures, diverted steel from Asia could undermine attempts to stay profitable.”
The European Union sharply criticised Trump’s announcement, warning it “adds further uncertainty to the global economy” and pledged potential countermeasures. About 3.89 million tonnes of EU-produced steel were exported to the US in 2024—exports now at risk.
Auto giant BMW, which previously cited a “high three-digit million” euro impact from Trump’s earlier 25% tariffs, saw its shares drop 1.8% Monday. Analyst Rella Suskin of Morningstar said BMW may see partial relief from looser auto restrictions recently signalled by the Trump administration, but warned the new tariff blow remains significant.
Wind turbine maker Ørsted was also flagged by Citi analysts as exposed due to a lack of US-based supply chains for key components.
Asia and Australia: indirect shocks and iron ore pressure
While the direct impact on Australia is muted—less than 1% of local steel production is exported to the US—analysts expect indirect consequences. Australia’s trade minister Don Farrell called the tariffs “unjustified” and “economic self-harm,” warning of reduced access to US-made machinery and higher prices on US imports.
The bigger issue for Australia is iron ore. China’s steel demand recently fell to its lowest level in eight years amid a prolonged property slump, dragging down prices. Trump’s tariff escalation has only deepened market pessimism, with iron ore futures in Singapore slipping below US$95 a tonne on Monday.
ASX-listed miners followed commodity prices lower: BHP fell 1.2%, Rio Tinto 1.7%, and Fortescue Metals 2.5%. Analysts from Blackwattle, Perennial and Ten Cap warned of sustained headwinds, particularly for lower-grade producers if Chinese stimulus disappoints or if Rio’s Simandou project in Guinea comes online later this year as expected.
Commonwealth Bank forecasts iron ore prices to average US$95 per tonne in H2 2025, but warns that lacklustre Chinese stimulus and excess steel supply could push prices lower.
Business investment under threat
In both the US and abroad, the suddenness of the policy shift has heightened fears around investment stability. “I don’t expect this to be policy in three months,” Spoores said. “Even three weeks it’s unclear.”
In the UK, which recently outlined a US trade deal but has not yet secured a steel tariff exemption, domestic firms are bracing for cancelled orders. UK Steel head Gareth Stace warned the situation raises the risk of severe disruption.
More broadly, analysts worry the move reinforces global trade volatility. For businesses like Whyalla Steelworks—currently in administration and seeking a buyer—Trump’s willingness to unilaterally rewrite trade policy raises serious doubts about long-term investment certainty.
As Spoores summarised, “These tariffs are at such a high level… they will affect a massive community of manufacturers which make a huge contribution to GDP and employment. There will be lobbying.”
