By Ion Jauregui – Analyst at ActivTrades
Donald Trump has returned to the political and economic spotlight with a clear message from Pennsylvania: double tariffs on steel and aluminum to 50%, aiming to "protect American industry."
The announcement comes right after discussions surrounding the $14.9 billion acquisition of U.S. Steel (NYSE: X) by Japan’s Nippon Steel (TYO: 5401)—a deal that has reignited debates over industrial sovereignty and foreign capital in strategic U.S. sectors.
The measure has not gone unnoticed. Canada, Europe, and Australia, key U.S. trade partners, have already expressed strong disapproval, warning of possible retaliatory actions. Trade tensions are once again on the rise, and the global manufacturing sector watches with concern as protectionist policies appear to make a comeback in the world’s largest economy.
Fundamentals of U.S. Steel (NYSE: X)
U.S. Steel has been one of the year’s standout stocks, especially after confirming its sale to Nippon Steel, but its operational numbers also deserve attention:
• Market capitalization: USD 8.2 billion
• P/E ratio (TTM): 11.8
• Q1 2024 revenue: USD 4.46 billion
• Q1 net income: USD 189 million (4.2% margin)
• Total debt: USD 3.9 billion
• Free cash flow (2023): positive at USD 1 billion
The company has strengthened its balance sheet by reducing debt and focusing investments on more efficient technologies (such as its Big River Steel facility). The new tariff support could further enhance margins in the second half of the year.
Technical Analysis
U.S. Steel (X) closed Friday at $53.82, up approximately +30% year-to-date.
• Key resistance levels: $48.83 (2023 highs) and $46.31 (April highs) – both broken
• Previous range: $42.00 high, $34.53 low
• Immediate support: the last broken resistance at $46.31
• MACD: crossing upward, signaling positive momentum
• RSI: 78.03%, nearing overbought territory
Since early 2024, the stock has traded within a well-defined range, with brief pullbacks in September that retested during the holiday rally. It has since regained momentum, breaking the $44.44 resistance on the fourth attempt after three failed tests.
Earlier in the year, the stock consolidated around the $38.00 area. If protectionist trade policy becomes official, we could see a breakout to new highs. However, if the Nippon deal faces regulatory or political hurdles, short-term volatility could follow. The key volume-weighted point of control is below the current range, with the last strong support area near $31.00.
Conclusion:
Trump’s statements represent a turning point that could directly benefit U.S. domestic steel producers like U.S. Steel. From a fundamental standpoint, the company shows financial strength and an increasingly efficient operational model. Technically, the stock is at a critical breakout zone, provided political support remains and merger conditions are clarified.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.