Steel Insiders Are Stoked About Trump's Tariffs

Trump has certainly gotten everyone's attention with his recent tariff threats. Whether you think he actually wants long-term tariffs in place to boost domestic production, or is just using them as a bargaining tool to get other demands met, the point remains that all of this posturing has real downstream effects on the real economy.

The market has certainly reacted negatively, with, at the time of this writing, the S&P 500 having erased all gains in the last six months and is showing no signs of recovering. But are there any significant players that benefit from tariffs and who are optimistic on the imposition of tariffs? Certainly, domestic manufacturers should benefit, as tariffs stand to weaken their foreign competitors. In fact, we looked at the top four domestic steel producers and found significant, recent insider activity that suggests they are in fact optimistic on the possibility of heavy tariffs.

Background

Trump's tariff threats began immediately after he was sworn in in January and have evolved dynamically based on the reactions of other countries, who have often responded with reciprocal tariffs. His first announcement was a 25 percent tariff on Canada and Mexico, the first and third largest sources of imported steel, respectively. A few weeks later, Trump strengthened his promise to domestic steel producers on February 10th when he promised 25 percent tariffs on all foreign steel and aluminum, not just Canada and Mexico. With a quarter of all US steel production coming from imports¹, this is a big boost to domestic producers. Trump has reiterated this tariff, which is currently in effect, multiple times in March.²

With such a big promise to domestic steel producers, what has been the reaction by insiders in these companies? As we've discussed before, insiders utilize their expertise to anticipate how macroeconomic and political changes will affect the performance of their company, and they buy and sell accordingly. While this is not the only reason that insiders buy and sell the stock of their own company, they have historically been able to trade very profitably, about three times the market return, on average over a one-month time horizon.³

Our investigation shows that US steel company insiders are sending an optimistic signal via their recent insider transactions.

Recent Transactions of US Steel Producer Insiders

We analyzed insider transactions of the four largest US steel producers, Nucor Corp, Steel Dynamics Inc, Cleveland-Cliffs Inc, and United States Steel Corp, and found insiders engaged in large dollar value acquisitions utilizing the "A" transaction code (for award) in every instance. These are stock and option awards for which insiders do not pay but they nevertheless benefit if the stock prices rise subsequently. Insiders can also acquire much larger positions using "A" transactions than by open market purchases (under code "P"), which is likely to attract regulatory attention. Further, these large awards come after Trump's February promise to tariff all foreign steel, suggesting that the awards are a sign of optimism on the insiders part of how the tariffs will benefit their companies.

(Note: The charts show the following transaction types which are reported on the SEC Form 4: A is an award or grant, F is essentially a sale in order to pay a tax or other liability, G is a gift, P is a regular purchase, and S is a regular sale. Also, for these charts, the A, F, and G transactions are simply valued as the number of transaction shares multiplied by the stock closing price on the transaction date.)

Here are the details:

Steel Dynamics, Inc. (Nasdaq: STLD)

Steel Dynamics is the fourth largest US producer of steel, producing 10.3 million metric tons in 2023. You can see the red uptick indicating a significant award on the right side of the graph, between February and March 2025. This is a highly positive signal.

A chart showing recent transactions by STLD insiders.

United States Steel Corp. (NYSE: X)

United States Steel Corp is the third largest domestic steel producer, producing 15.75 metric tons in 2023. You can see the large award in late February which dwarfs all other transactions. Again, this is a highly positive signal.

A chart showing recent transactions by X insiders.

Cleveland-Cliffs Inc. (NYSE: CLF)

Cleveland-Cliffs is the third largest domestic steel manufacturer, having produced 17.3 metric tons of steel in 2023. You can see the large award in late February 2025 in addition to open market purchases. Once again, a strong positive signal.

A chart showing recent transactions by CLF insiders.

Nucor Corporation (NYSE: NUE)

Finally, we have the largest domestic steel producer, Nucor Corporation, with 21.2 metric tons of steel produced in 2023. You can see there are significant insider awards occurring in late February 2025 as well.

A chart showing recent transactions by NUE insiders.

Conclusion

Trump's steel tariffs stand to greatly benefit domestic steel producers by increasing the price manufacturers pay for imported steel. In turn, the insiders of those steel producers are sending an optimistic signal mainly via stock and option award transactions from February 2025. An interesting follow-up analysis would be to investigate the source of these award transactions to see how discretionary they are, which would represent a stronger signal than if they were simply pre-scheduled.

We will keep watching to see how it plays out, if the tariffs do end up going through, and whether or not these companies benefit as a result.

Sources

Authors’ disclosure: This article expresses the authors’ opinions. None of the authors have any business relationship with any of the companies that are mentioned in this article. This article does not constitute any recommendation or advice as to whether any investment is suitable for any particular investor. Consult with your licensed financial advisor before making any investment decision. This article was passionately written by a real human being without any assistance from artificial "intelligence", and we hope you enjoyed it.