Trump’s Liberation Day Impact – Steel Stocks Tumble With Broader Market, UBS Flags Tariffs As 'Incremental Negative' For These Companies
The brokerage noted that the larger-than-anticipated tariffs could lead to demand destruction for steel companies but acknowledged that negotiations and potential rollbacks remain possible.
Steel stocks fell sharply in pre-market trading Thursday after President Donald Trump's "Liberation Day" tariffs took effect, bringing in a 10% duty on all countries and additional reciprocal tariffs across 185 nations.
Steel Dynamics (STLD) and Nucor (NUE) shares slid nearly 5% on Thursday morning. Posco, which UBS views less favorably, declined by only about 1%.
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UBS analysts warned that the tariffs represent an "incremental negative" for U.S. steelmakers, citing concerns over weakened demand.
The brokerage noted that the larger-than-anticipated tariffs could lead to demand destruction, though it acknowledged that negotiations and potential rollbacks remain possible.
UBS also noted that no further tariffs were imposed on autos beyond the previously announced 25% levy. However, it is estimated that the automotive sector could still see a reduction of 1.5 million units in North American steel production due to existing trade measures.
Despite the concerns, UBS maintained a ‘Buy’ rating on both Steel Dynamics and Nucor while reiterating a ‘Sell’ rating on South Korea’s Posco (PKX).
Steel stocks initially rallied in March after the Trump administration initially imposed 25% tariffs on steel and aluminum imports. However, Steel Dynamics and Nucor have lost ground over the past month, with Steel Dynamics down nearly 7% and Nucor falling more than 11%.
In 2025, Steel Dynamics shares have gained 10%, while Nucor is up 6%.
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