31 May 2018: US slaps steel tariffs on its allies
On May 31, 2018 Commerce Secretary Wilbur Ross announced that the US would impose 25% tariffs on steel and 10% on aluminum from the European Union, Canada and Mexico starting the next day. The allies promised retaliation. Domestic steelmakers got protection and a short-term price boost, while companies that bought steel faced higher costs. The trade war that followed rattled markets for more than a year.
The lesson: Protection helps the protected industry, but its customers and their shareholders usually pay the bill.
What it meant for investors
$1,000 in US Steel at the start of 2018 → $1,528 today, vs $2,519 in the S&P 500.
We start the clock at the start of 2018, the year it happened. That is 1.5 times the money, but $991 less than a plain index fund made over the same years.
What US Steel teaches: Cyclical stocks look cheapest when earnings peak and most expensive at the bottom, so buying on recent profits in heavy industry often means buying the top.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2015 | $27.00 | $2,037 | $3,301 |
| 2018 | $36.00 | $1,528 | $2,519 |
| 2020 | $11.00 | $5,000 | $2,092 |
green = beat the S&P 500 · red = lost money
What if you bought US Steel? Every starting year and the full story →
More US Steel history
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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