Final Thoughts

But sentiment around “tariffs” seems to have fallen over the past two weeks as they have become shorthand not for Section 232 but for “Liberation Day” and its “reciprocal” tariffs. We’ve even got some numbers to support that.

SMU readers are not anti-Trump…

Before I dig into those figures, I want to be clear that SMU is not exactly a hotbed of anti-Trump activists.

At Steel Summit in August, 63% of those who participated in a snap poll said Trump would win the White House. That squared with the 58% of survey respondents who predicted a Trump victory just before the election.

We saw a similar result in August 2020 during a (virtual) Steel Summit. Fifty-three percent said they supported Trump, 41% Biden, and 6% third parties. Heck, you could go back to 2016, when it was 48% Trump, 22% Clinton, and the rest third parties.

If Trump and tariffs are now almost synonymous, there should be ~50-65% support for them, right? That’s not what we’re seeing.

But they might be becoming anti-tariff

We started asking a simple question in our weekly surveys on March 17 – the week after renewed Section 232 tariffs went into place, and 2.5 weeks ahead of “Liberation Day” on April 2. (The latest are results in Market Chatter.)

We’ve asked that question four times now. And here are the numbers: Approximately 25% say tariffs are helping their business, 40% say they are hurting business, and 35% aren’t sure. The number of people who say tariffs are hurting business has been relatively consistent. But we’ve seen the number of people saying tariffs were helping business drop from roughly 30% to about 20% in our last survey. We’ve also seen the number of people who are unsure of their impact increase from about 30% to closer to 40% this week.

In other words, sentiment about tariffs has turned increasingly negative among a readership that mostly supported Trump. It’s not like Trump made any secret that he was going to roll out tariffs. So I don’t know if it’s the tariffs themselves. I think it’s more the scope of them, the chaotic rollout, and the uncertainty that they’ve injected into the market.

Survey says uncertainty sucks

Scroll through Market Chatter and you’ll find the word “uncertainty” mentioned more than a few times. Sure, tariffs have their advocates. Case in point: “Helping, we are a 100% domestic M&M house.”

But not everyone is a 100% melted and made in the US shop. And there are in general more comments like this:

“At first definitely helping, but not so sure now.”

“Current uncertainty is hurting our business as nobody ever likes uncertainty.”

“The market understands how to operate in a steel tariff environment but not in this new uncertain climate of tariffs on everything. The steel marketplace is paralyzed.”

Flip-flops do too

Stocks staged a massive relief rally on Wednesday when Trump announced a 90-day pause on the highest “reciprocal” tariffs and reduced the levy to 10% for most countries. Markets then melted down again on Thursday when the president increased tariffs on China to 145%.

The wild swings around Liberation Day tariffs get the most attention. But maybe we shouldn’t have been surprised. If there is a constant, it’s the constant flip-flopping. Case in point: We saw blanket tariffs on Canada go from nothing to 25%, to 50%, and back to nothing in the span of about a day in early March.

It’s not only tariffs. We experienced something similar this week with Nippon Steel’s proposed acquisition of U.S. Steel. Trump ordered a new national security review of the deal. Investment firm Ancora dropped its bid to replace U.S. Steel CEO David Burritt with former Stelco CEO Alan Kestenbaum, citing the increased likelihood of Nippon Steel closing the deal. And then Trump turned around and said he just didn’t like the idea of U.S. Steel being owned by a Japanese company.

The flip-flop on USS seemed to be based more on nostalgia than any current market dynamic. And sometimes I wonder how much of that nostalgia is informing some of Trump’s tariff policies.

A little too much nostalgia?

They’re designed in theory to support steel. But is it to support the steel industry of today or the steel industry of the 1980s? As SMU reported earlier this week, the reciprocal tariffs were applied to metallics – including pig iron from Brazil and DRI from Trinidad and Tobago, key feedstocks for certain domestic EAF mills.

My understanding is that the tariffs also apply to DR-grade pellets from Sweden and Brazil. That means companies making DRI and HBI in the US (something you’d think we want to encourage) now pay more for their feedstock. I’ve in addition heard that certain mills are leery of shipping iron ore from Canada, which has ample reserves, because of concerns that the tariffs on our northern neighbor could change on a dime.

Ships move slower than social media, Trump’s preferred means of changing trade policy. That’s a recipe for supply chain problems.

I realize the president has an awful lot on his plate. He can’t devote a ton of time to any one subject, let alone steel. But maybe someone should be paying closer attention to the details?

When it comes to steel and metallics, there are other countries with more and higher-quality ore reserves than the US. Or, to take a more basic example, other parts of the world have longer growing seasons than the US. Tariffs won’t change such realities.

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