Replies to post #28991 on The Rising Influence of Rising Affluence

[jbog]

Cleveland-Cliffs, Tariffs and Stock Buybacks
The steel maker plows tariff-padded profits into buying its own shares.

Cleveland-Cliffs’s stock jumped 7% Tuesday after CEO Lourenco Goncalves announced plans to “put a stronger focus on aggressive share buybacks.” He says it’s a good time to buy the company’s shares, which he thinks are undervalued despite a rich price-earnings ratio of 26.

Perhaps the CEO doesn’t believe investors are properly valuing tariffs and the subsidies for domestic steel in the 2021 infrastructure bill and Inflation Reduction Act. Federally funded public works must be built with U.S. steel, and green energy developers get a 10% bonus tax credit if they use domestic steel.

President Biden has kept the 25% Trump tariff on foreign steel. And Cleveland-Cliffs, the United Steelworkers union and Mr. Brown last year lobbied for more tariffs on tin-mill steel. In September the Commerce Department slapped duties of 122.5% on Chinese tin and lower margins on imports from Germany (6.9%), Canada (5.3%) and South Korea (2.7%).


https://www.wsj.com/articles/cleveland-cliffs-stock-buybacks-tariffs-steel-lourenco-goncalves-sherrod-brown-9da2377f?mod=hp_opin_pos_3#cxrecs_s