Steel, aluminum stocks slide on reports of Trump tariff rollback
Derivative product exemptions could intensify competition for domestic producers
Shares of major US steel and aluminum producers fell sharply on Friday following reports that the Trump administration is planning to scale back certain tariffs on metal imports, potentially exposing domestic manufacturers to increased competition from cheaper overseas supplies.
Century Aluminum led the declines, dropping 6.4% to $46.53, while Steel Dynamics fell 3.6% to $192.42 and Nucor declined 2.4% to $184.24. Alcoa, America's largest aluminum producer, slipped 0.7% to $60.08. The sector-wide sell-off comes as investors react to reports suggesting the administration may exempt hundreds of metal products from tariffs originally imposed to protect domestic industry.
The proposed rollback would target "derivative products"—items manufactured from steel and aluminum rather than the raw metals themselves—including appliances, motorcycles, wind turbines, mobile cranes, railcars, and electric vehicle parts. According to government records, more than 400 product categories were added to the tariff list in 2025.
The policy shift represents a significant reversal from February 2025, when President Trump reinstated a 25% tariff on all steel imports and increased aluminum tariffs from 10% to 25%, with further hikes to 50% announced in June. Those measures had boosted domestic producers, with Century Aluminum shares surging more than 10% following the initial announcement and Nucor gaining 5.6%. The tariffs were designed to reduce foreign competition and support higher domestic prices and expanded margins for US steelmakers.
Analysts warn that rolling back tariffs on derivative products could undermine those protections by allowing cheaper imported components back into the market, potentially compressing profit margins for domestic producers. A New York Federal Reserve study cited in recent reports found that approximately 90% of tariff costs were borne by US businesses and consumers, contributing to broader inflationary pressures.
The administration is reportedly considering halting further expansion of existing tariff lists and instead pursuing more targeted national security investigations into specific goods, according to multiple reports. This more surgical approach would mark a departure from the broad-based protectionist measures that had bolstered US steel and aluminum stocks throughout much of 2025.
Nucor, the largest US steel producer with a $44.5bn market capitalization, had been one of the tariff policy's biggest beneficiaries, with shares climbing nearly 20% in early 2025. Steel Dynamics, valued at $30.3bn, had similarly rallied on expectations of reduced import competition. Both companies currently trade at elevated valuations—Nucor at 25.9 times trailing earnings and Steel Dynamics at 25.8 times—raising concerns that any tariff reduction could trigger further downside.
The aluminum sector faces particular uncertainty, as primary producers like Century Aluminum and Alcoa have different exposure profiles depending on their reliance on imported raw materials versus domestic production capacity. Century Aluminum had previously applauded the tariff actions, with the company's CEO stating they would "protect American jobs and national security by leveling the playing field."
Friday's declines reflect growing investor concern that the competitive landscape for US metals producers could shift dramatically if tariffs are narrowed, potentially reversing the sector's strong performance over the past year.