After a 25 percent tariff imposed on steel imports by U.S. President Donald Trump and his administration in March, the VanEck Vectors Steel ETF (NYSEArca: SLX) has dropped 8 percent after reaching a high of $51.37 in February.
After the March tariff on steel imports, the Trump administration expanded them on June 1 by removing temporary country exemptions for members of the European Union, Canada and Mexico. Based on data released by the American Institute for International Steel, steel imports to the United States surged 12.1 percent in April to 3.76 million net tons.
Related: Steel ETF Tumbles After White House Tariff Plan
Through the first four months of 2018, steel imports were up 1.2 percent year-over-year to 12.45 million net tons–a byproduct of the March tariffs, according to the American Institute for International Steel. The Trump Administration announced the tariff in March after a Commerce Department investigation revealed that global imports of steel pose a threat to national security, prompting an April stockpiling prior to the June 1 exemption removals.
The AIIS projected “a sharp drop-off” in June and SLX has been feeling the effects the past month. In the last 30 days, SLX is down 6.4% from its May 15 price of $50.39 and down 3.14% today.
“After that will likely come a scaling back of capital expenditures, price increases for consumers and a slowdown of what had the potential to be the strongest economic growth in 20 years,” the AII warned.
Related: Tariff News Doesn’t Lift Steel ETF
According to the AIIS, U.S. steel exports were up 0.5 percent year-over-year to 861,005 net tons in April, but a potential trade war looming with Canada and Mexico, key U.S. trade partners in the North American Free Trade Agreement who are large buyers of American steel, could hamper volumes in the future.
For more ETF news related to the steel industry, click here.