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CLF Pops as US Slaps Tariffs on Chinese Steel Shipped via Vietnam

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US steel stocks’ roller coaster ride continues

US steel stocks (SLX) and Cleveland-Cliffs (CLF) have been on a roller coaster ride that refuses to calm down, underpinned by Trump’s policy flip-flops, especially on trade tariffs. CLF saw a lot of ups and downs, first due to recommendations of the US Department of Commerce, then the imposition of steel tariffs, and finally the exemption of some countries from tariffs, which toned down the overall impact. Just yesterday we discussed how steel stocks and CLF were down after the US-China trade war was put on hold for the time being. However, it seems like steel stocks have something to cheer about after all.

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Imposition of tariffs on Chinese steel shipped via Vietnam

The US Department of Commerce imposed tariffs on steel imported from Vietnam that originated in China. After the department’s findings that these steel products were evading the US anti-dumping and anti-subsidy orders, these tariffs were imposed. In addition, US Treasury Secretary, Steven Mnuchin, also said that the recent trade negotiations will not impact the steel and aluminum tariffs on China.

CLF and peers rise on steel import duties

After the news came about, US steel stocks (SLX) started trading in the green again led by Cleveland-Cliffs, which gained 2.6%. AK Steel (AKS) and U.S. Steel (X) followed with a 2.3% rise and a 2.1% rise, respectively. In contrast to steel stocks, the US equity markets fell yesterday due to the uncertainty over the outcome of US-China trade talks. The decline was led by the Dow Jones Industrial Average Index (DOW), which slipped 0.70%. A similar decline was reflected in the SPDR Dow Jones Industrial Average ETF (DIA), which tracks the DOW. The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 Index, fell 0.28%. The industrial stocks led the market’s decline with Boeing (BA), Caterpillar (CAT), and 3M (MMM) falling 2.5%, 1.7%, and 1.4%, respectively.

In the next part, we’ll elaborate on the duties slapped on Vietnamese steel originated in China, and how these duties could impact Cleveland Cliffs and its US peers.

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