LONDON/CHICAGO, Nov 23 (Reuters) – The leading U.S. steelmakers’ association
mentioned it has been in contact with President-elect Donald Trump’s transition team
considering that his election on Nov. eight, as the market seeks tougher trade defenses beneath his incoming administration.
Trade restrictions are tantalizing for an American steel sector struggling with foreign competitors, but analysts say new measures could trigger a backlash from U.S. carmakers and other shoppers who want unfettered access to overseas markets.
“We initially communicated with all the transition team before the election and are continuing that effort post-election,” mentioned Lisa Harrison, a spokeswoman for the American Iron and Steel Institute (AISI), whose members incorporate ArcelorMittal USA (ISPA.AS) , Nucor Corp (NUE.N) , U.S. Steel (X.N) and AK Steel Holding Corp (AKS.N) .
She didn’t comment around the content in the talks or who was involved, but said Trump adviser Dan DiMicco, a former Nucor chief executive who is the major contender for U.S. trade representative in the Trump administration, is actually a robust advocate for the market.
“We are proud with the prominent part he played within the campaign – and now in the transition,” she stated.DiMicco has accused China, a top globe steel producer, of “rampant and destructive trade cheating” in his blog.Officials in Trump’s transition group didn’t quickly respond to requests for comment. The New York businessman campaigned on a guarantee to market the U.S. steel industry and toughen up trade terms with China and also other nations.U.S. steel traders said they had been confident that the industry’s representatives have been pushing Trump’s transition group challenging for far more trade restrictions, and anticipated that DiMicco was bringing those concepts directly to Trump.
“They have Trump’s ear big-time within the kind of DiMicco,” one with the traders stated, asking to not be named.But he added that he anticipated auto manufacturers to push back: “Eventually its going to backfire massively. Carmakers will start screaming. But for now it really is a query of who lobbies the hardest.”U.S. steel firm stocks (.DJUSST) have surged 25 percent since Trump’s election victory, fueled by bets for stronger trade defenses, tax cuts and infrastructure spending.Trump has pledged to invest $1 trillion over 10 years on infrastructure, slash corporate and top-rate person taxes, redraw trade deals to win back American jobs, and slap punitive import tariffs on Mexican and Chinese goods.While investors have cheered his tax reduce and infrastructure plans, his protectionist stance on trade has some worried. Protectionism stokes inflation and whilst this may well initially help protected sectors like steel, it risks sparking a trade war that could eventually damage U.S. and worldwide development.”Higher steel prices are negative for actual economic activity and the risk for steel within the longer term is the fact that price-sensitive demand could eventually lower,” said Jefferies analyst Seth Rosenfeld.Ford (F.N) mentioned final week that Trump’s strategy to slap 35 percent tariffs on automobiles and trucks imported from Mexico would hurt the auto industry along with the U.S. economy, and has remained committed to making compact vehicles in Mexico regardless of the tariff threat.