Steel stocks jumped Thursday after a report President Donald Trump said he is considering quotas and tariffs on steel imports to the U.S.
“There are two ways — quotas and tariffs. Maybe I’ll do both,” Trump said Wednesday evening, according to excerpts of his conversation with reporters on Air Force One. The transcript was made available Thursday afternoon.
“Not only China, but others. We’re like a dumping ground [for steel], okay?” Trump said. “They’re dumping steel and destroying our steel industry, they’ve been doing it for decades, and I’m stopping it. It’ll stop.”
US Steel 2-day performance
Many on Wall Street upgraded the steel stocks in anticipation of a tougher U.S. announcement on foreign steel producers, in favor of the U.S. firms.
“President Trump’s comment today about quotas and tariffs on steel and the positive response across steel stocks suggests more upside ahead when an official announcement is made by the Commerce Department,” Jim Strugger, managing director, derivatives strategist, at MKM Partners, told CNBC in an email Thursday. “We’re suggesting that clients get long or longer here.”
On Wednesday, Strugger noted in a report to clients that MKM was seeing unusual bullish activity in options for stocks such as AK Steel.
To be sure, the U.S. government hasn’t made an announcement on steel tariffs yet. In late April, Trump directed the Commerce Department to investigate whether steel dumping threatens U.S national security. A report on those findings has been delayed, and the steel industry still awaits an official decision.