Trump Trade: U.S. Steel slides as President-elect ‘totally against’ Nippon deal

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President-elect Trump with this daily recap compiled by The Fly:

TOTALLY AGAINST DEAL: Shares of U.S. Steel (X) are under pressure on Tuesday after President-elect Donald Trump said on his Truth Social platform that he is “totally against” the company’s deal to be acquired by Nippon Steel (NPSCY). In his post, Trump stated that, “I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan. Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST! As President, I will block this deal from happening. Buyer Beware!!!”

TARIFF IMPACT ON RETAILERS: Discussing the potential impact of Trump 2.0 tariffs would mean for U.S. retailers, Bernstein said the firm believes the Dollar Tree (DLTR) banner and Target (TGT) are among the most exposed to potential tariff risks, followed by Home Depot (HD) and Lowe’s (LOW), due to their higher exposure to imports. Much of this concerns consumer goods imports from China, the firm notes. Import data shows that the most relevant impact to retailers from imposing additional tariffs on Canada, Mexico, and China will be on consumer goods categories – computers, cellphones, toys/games, electric apparatus, and apparel & textiles. There will also be indirect impacts from increases in the price of commodities such as oil & gas and aluminum, but these could be mitigated by increased domestic supply, Bernstein adds.

China represents the biggest source of both Dollar Tree and Target’s imports. Looking back at the impact of the 2019 tariffs, Target and Dollar Tree each experienced about 30bps-40bps gross margin headwind due to increased product costs, the firm highlights. Lowe’s also cited a 25bps-40bps gross margin headwind. Depending on the nature and magnitude of additional tariffs this time around, retailers with meaningful exposure to Chinese imports could again face margin headwinds.

Tariffs on Canadian and Mexican imports are likely to have a much smaller impact on Bernstein’s coverage. Imports from Canada and Mexico skew towards commodities and industrial components. The only meaningful tariff exposure comes from computers and electric apparatus, which Mexico exports to the U.S. in relatively large. Companies with meaningful exposure to the electronics and appliances categories could be impacted, although the precise impact and tariff level is unclear at this stage, the firm adds.

STOCK PRICE TARGET CHANGES:

BTIG raised the firm’s price target on Buy-rated Upwork (UPWK) to $18 from $16, Buy-rated SuRo Capital (SSSS) to $6.50 from $6, Buy-rated RealReal (REAL) to $6.75 from $5.50, Buy-rated and Cars.com (CARS) to $25 from $23 as part of a broader research note previewing 2025 for the e-commerce sector. Heading into next year, it is a “virtual certainty” that government policy will be a major factor for the market, and the firm is of the opinion that the incoming administration will pursue policies that will be a net positive for consumers.