Trump win ends US steel sector’s election uncertainty

United States steel market participants hope that a renewed “America First” economic approach will drive increased demand following the re-election of Donald Trump.

Trump declared that the electorate had given him “an unprecedented and powerful mandate” as he declared victory in the US presidential election this morning. The Republican Party also regained control of the Senate for the first time in four years in a decisive overnight result. 

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Tariffs expected from ‘America First’ approach 

In his last term in office, President Trump introduced 25% Section 232 tariffs on steel imports into the US. Further trade protection is expected in his second term as part of efforts to boost domestic manufacturing.  

A 10% tax on all imported goods has been suggested during campaigning, along with tariffs of up to 200% on imported vehicles. President Biden had already introduced a 100% tax on Chinese electric vehicles (EV).  

During his campaign, Trump also spoke of a “Reciprocal Trade Act”, which would allow reciprocal tariffs to be applied to any country’s tariffs on US exports.  

Despite election support from EV pioneer Elon Musk, Trump is expected to remove EV mandates aiming to encourage the adoption of zero-emissions vehicles. This is part of a series of changes that would influence the US approach to climate change. 

Withdrawal from the Paris Climate agreement is expected, following the Trump administration’s move away from the international emissions-cutting framework in 2020. Trump has also vowed to increase US production of fossil fuels. 

The second Trump presidency will also shed further doubt over Nippon Steel’s takeover of US Steel. The incoming president has repeatedly said that he will block the sale – stating the business should be US-owned. 

MEPS will explore the repercussions of the US presidential election’s outcome in a special episode of its Speaking of Steel podcast. The episode will feature contributions from US market consultant Laura Hodges alongside market analysts Jon Carruthers-Green, Michelle Kirton and Stuart Gray. 

Ahead of this week’s podcast recording, Carruthers-Green said: “In a second Trump presidency, similar actions to those taken in his first term are likely. His America First trade policy suggests a continued focus on protectionist measures aimed at bolstering US industries. This approach will lead to increasingly strained relationships with key trade partners, as Trump frequently criticises the trade practices of China and the EU.” 

Sentiment among MEPS’s US research partners 

Many of MEPS’s US research partners hope that an end to a period of pre-election uncertainty, and the re-election of Donald Trump, will trigger an uptick in domestic output and, consequently, steel demand. Steel prices have suffered amid subdued demand during 2024. In August, MEPS’s US hot rolled coil price dipped to its lowest level since December 2022. Despite a modest increase in recent months, the price remains 33% down on 2024’s January peak. 

MEPS steel market analysts Michelle Kirton and Stuart Gray said that MEPS’s US research partners will be hoping for a post-election market improvement. 

Kirton said: “With the election looming, market activity stalled as participants awaited clarity – some saying that depending on the outcome there will be some industry winners and some losers, it’s just a matter of which ones.  

“Either way, most are hopeful of a pickup in steel buying activity early next year, following the outcome of the presidential election.” 

Gray said: “MEPS research partners had noticed a pause on new projects and a reduction in activity in recent months and had attributed this to the US presidential election. In the coming months there will be clear focus on restarting investment and ramping up activity, which is good news for steel demand.  

“Many steel market participants hope that Trump’s ‘America First’ approach will drive US manufacturing in the longer term. This is likely to result in some upward pressure on prices.”