CRU: Trump tariffs could stimulate steel demand

Now that the dust has settled from the US election, as have the immediate reactions in the equity, bond, and commodity markets, this is a prime opportunity to look at how a second Trump presidency might affect the US steel market. The focus of this Insight is to look past the near-term disruptions and reactions surrounding the return of President Trump and analyze the potential for a meaningful impact that might come over the next two to four years of his presidency. 

On the campaign trail, President Trump consistently spoke of using tariffs as the primary tool of his economic platform. He advocated for the liberal use of tariffs as a means to support manufacturing and economic growth in the US, as well as a way to lower or end income taxes. While the latter of these is not economically feasible, the former does have the potential to create a positive impact, though it will take time and patience. That said, per CRU’s initial comments at the time of the election, tariffs have the potential to stoke inflation and damage longer-term prospects for spending. Equally, retaliatory behavior and a ‘trade war’ would have a seriously negative impact on global and US growth. However, the US impacts would be less due to trade being a much smaller proportion of its economy.