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Steel ETF Could See a Trump Bump

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This article was originally published on ETFTrends.com.

Steel industry-related exchange traded funds could strengthen as President Donald Trump wants to revive U.S. steel.

President Trump said Monday that he wants to bring the steel industry back to America even if it means the administration will enact tariffs on imports from other countries, Reuters reports.

“I want to bring the steel industry back into our country. If that takes tariffs, let it take tariffs, OK? Maybe it will cost a little bit more, but we’ll have jobs,” Trump told a meeting at the White House with state governors.

President Donald Trump has told confidants that he wants to impose the harshest tariffs on steel and aluminum imports recommended by the Commerce Department, Bloomberg reported.

The U.S. Commerce Department has recommended curbs on steel and aluminum imports from China, which has been accused of dumping on the global markets, and other countries. Trump said he wants to place a 24% tariff on steel imports, the harshest outcome of three options presented to him, along with a 10% duty on all aluminum entering the U.S. The White House, though, had said Trump has not yet made a final decision on the matter.

Investors who are interested in gaining exposure to a potentially strengthening steel industry can look to the targeted VanEck Vectors Steel ETF (SLX) and the broader SPDR Metals & Mining ETF (XME) .

SLX tries to reflect the performance of the NYSE Arca Steel Index, which follows global companies involved in the steel industry. The global steel ETF includes a 37.2% tilt toward U.S. steel, along with 19.1% Brazil, 13.3% Netherlands and 11.1% U.K. However, since SLX includes more international than U.S. components, any tariffs could weigh on this ETF.

Alternatively, investors who want to focus on U.S. steel may turn to XME, which includes a hefty 49.7% tilt toward steel producers, along with coal & consumable fuels 14.1%, aluminum 12.0%, gold 9.0%, silver 6.3% and copper 5.1%.

For more information on the steel industry, visit our steel category.

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