The U.S. steel industry is booming months after President Trump imposed double-digit tariffs on the metal, but the surge comes at the expense of other industries paying millions more in costs as a result of the duties.
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At Nucor Corp., the nation’s largest steel manufacturer, 2018 profits were a record $2.3 billion, or $7.42 per share, a 24 percent increase over the prior record reached in 2008. Sales at the Charlotte, N.C.-based company grew 23 percent last year to $25 billion, it said on Tuesday.
"The best way to sum up 2018 is this -- it was a record year for Nucor. We posted record earnings per share and record revenue, and we shipped a record amount of steel," CEO John Ferriola said.
Steel Dynamics, the second-largest producer by volume, also recently reported a record 60 percent rise in profits in 2018 to $1.3 billion, or $5.35 per share. And at AK Steel, net income grew 79 percent to $186 million for the year.
"Higher steel selling prices and shipments during 2018, particularly to the distributors and converters market, more than offset higher costs for certain raw materials," the West Chester, Ohio-based company said on Monday.
Both Steel Dynamics and Nucor are spending billions to construct new steel processing facilities. Trump on Monday boasted that the 25 percent tariffs on the metal “revived our Steel Industry.”
“New and expanded plants are happening all over the U.S. We have not only saved this important industry, but created many jobs. Also, billions paid to our treasury. A BIG WIN FOR U.S,” he tweeted.
But while the steel industry prospers, other top U.S. companies are suffering from the duties and subsequent retaliatory tariffs that the European Union and others imposed.
|STLD||STEEL DYNAMICS INC.||28.14||+0.73||+2.66%|
|F||FORD MOTOR COMPANY||6.69||+0.08||+1.21%|
Harley-Davidson’s fourth-quarter profits were essentially flat after suffering a $13.3 million profit hit due to the tariffs. Overall, the levies hit the Milwaukee-based motorcycle manufacturer for $23 million in 2018. Since the company decided in 2018 to move production overseas to mitigate the impact of the new tariffs, sales in the U.S. have sputtered.
At Caterpillar, which recently raised prices to help blunt the impact of the duties, the tariffs added over $100 million in costs in 2018. The company's stock on Monday had its largest one-day decrease since August 2011.
“Positive price realization was offset by higher manufacturing costs, largely due to high material and fright costs, as steel prices, tariffs and supply chain inefficiencies continue to impact our results,” CFO Andrew Bonfield told investors.
On top of the duties on steel and aluminum, the White House has also imposed tariffs on $250 billion in Chinese products, impacting a wide range of industries from auto manufacturers to retailers.
Ford Motor Co. said recently the tariffs would add $700 million in costs in 2019. The Dearborn, Mich.-based company reported a loss of $116 million, or 3 cents per share, in the fourth quarter.
U.S. and Chinese trade officials are slated to meet in Washington, D.C., this week to continue negotiations on a trade deal. While Trump and President Xi Jinping will be the "ultimate negotiators," the ongoing discussions are "vitally important to lay out options," top White House economic adviser Larry Kudlow told Fox Business on Tuesday.
He declined to say whether Trump would lift the tariffs on the country if a deal is reached to address both the trade deficit, along with other long-standing issues like Beijing's theft of intellectual property.