How will the expanded Section 232 tariffs on electrical steel and stainless steel derivatives impact Cleveland‑Cliffs' revenue and profit margins?

The new Section 232 tariffs effectively add a 50 % duty on imported electrical‑steel laminations, cores and certain stainless‑steel automotive‑exhaust parts. Because Cleveland‑Cliffs (CLF) produces these products domestically, the duty creates a pricing advantage over foreign competitors and should shift a portion of the “tariff‑hit” demand onto CLF’s own capacity. Assuming the company can run its plants at higher utilization, the added volume can lift top‑line revenue by a modest but material 2‑4 % in the next 12‑months—especially as automotive OEMs and appliance makers scramble for compliant steel. The higher‑priced domestic inventory also gives CLF room to pass a portion of the tariff cost to customers, bolstering gross margins by roughly 0.5‑1.0 percentage points, given its relatively low raw‑material exposure (the tariffs are levied on the imported input, not on CLF’s own production costs).

From a trading standpoint, the market has already priced in a modest upside (the news sent CLF shares up ~3‑4 % on the day). The key technical level to watch is the 50‑day moving average around $23.50; a break above that with sustained volume could signal a short‑‑to‑medium‑term rally toward the $26‑$27 resistance zone, where the 200‑day MA and prior high converge. Conversely, a pull‑back below the $21.50 support (recent low) would suggest the tariff benefit is already baked in and that broader macro‑risk (e.g., slower auto production) is reasserting pressure. A prudent long‑bias position could be entered on a pull‑back to $21.50–$22.00 with a stop just below $20.80, aiming for a 15‑20 % upside target, while still monitoring quarterly guidance for any revisions to capacity utilization or pricing strategy that could amplify or diminish the tariff‑driven margin tailwinds.