U.S. steel, aluminum stocks jump on Trump announcement of tariffs on steel and aluminum imports

Shares of U.S. steel and aluminum companies surged further on Thursday, while major manufacturers dipped after President Donald Trump said his administration will impose tariffs on steel and aluminum imports next week.

At a meeting with U.S. industry officials at the White House, Trump said the United States will set tariffs of 25 percent on steel imports and 10 percent on imported aluminum.

Shares of AK Steel Holding Corp jumped as much as 12 percent, while U.S. Steel Corp rose 9.5 percent. Nucor Corp and Steel Dynamics Inc gained more than 4 percent.

Aluminum producer Century Aluminum Co's shares rose as much as 15 percent, while Alcoa Corp increased 3 percent.

A raft of U.S. industrial companies, which are major consumers of steel, including Caterpillar Inc , Boeing and tractor maker Deere & Co saw their shares fall by almost 2 percent.

The tariffs could pose a 'challenge” for most industrials as they would not only increase imported steel prices, but also domestic steel prices, putting them at a competitive disadvantage vis-à-vis their non-U. S. competitors.

'The industrial metal companies, the domestically focused ones, are probably going to benefit from this,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.

'In the longer run we've seen that tariffs generally don't work and actually they generally hurt the economy. In the immediate to longer run it's probably seen as a step towards trade wars (and) retaliation. Negotiations with NAFTA could break down over this.”

CNBC cited an unidentified White House official as saying Trump was set to announce tariffs at 11 a.m. EST on Thursday, but also said that officials did not say what the president would specifically announce.

Reuters reported late on Wednesday that several top U.S. steel and aluminum executives had been invited to the White House on Thursday for what could be a major trade announcement.

Trump has vowed to take steps to crack down on imports of steel and aluminum and has been considering imposing hefty tariffs on imports of the metals from China and other countries.

The U.S. Commerce Department recommended last month that Trump impose steep curbs on steel and aluminum imports from China and other countries ranging from global and country-specific tariffs to broad import quotas.

(Reporting by Arunima Banerjee and Sruthi Shankar in Bengaluru; editing by Patrick Graham, Bernard Orr)