The U.S. has imposed 50% tariffs on a wide range of Canadian goods, while Canada has retaliated with $20 billion in counter-tariffs (15% to 50%) targeting over 700 American products. Steel and materials stocks initially rallied — Nucor, Cleveland-Cliffs and the VanEck Steel ETF posting gains of over 28% year-to-date — before retreating, illustrating the volatility inherent in trade wars. The automotive sector is most affected due to its complex cross-border integration, where parts cross the border multiple times during the production process. According to Moody’s, U.S. steel producers may benefit from a structural advantage due to the size of the American market, but the automotive sector has no winners. Companies are permanently restructuring their supply chains in response to the ongoing uncertainty.
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