Height Securities analyst says UK’s exit from EU could lead to inflated protectionist policies for US steel producers like AK Steel and its peers
Yesterday, shocking news emerged that the United Kingdom has parted its ways from the European Union, leaving the investors in dismay, thus a majority of global financial markets were trading in red. The industry experts believe that Brexit (Britain’s exit from European Union) has strong and wide implications for the United States’ economy, which is already under marred by several headwinds. The chief of the United States central bank, Federal Reserve, along with top monetary policy maker Janet Yellen, have already warned the public of the adverse impacts arising from Brexit. They mentioned that UK’s vote to leave out the EU “would negatively affect financial conditions and the U.S. economy.”
The import/export of goods between two nations only comprises 0.5% of United States’ economic activity. However, the connections go well beyond direct trade between the two global powerhouses.
The experts in the industry suggest that Brexit would create a domino effect on the economies across the globe and also damage the world economics. Following the heightened and heated discussions on Brexit – which has caused distress to the global economies – Height Securities analyst released a research note shedding light upon how the recent event could turn out for steel producers in United States.
The analyst at the investment firm mentioned that the United States’ steel producers such as AK Steel Holding Corporation (NYSE:AKS), United States Steel Corporation (NYSE:X) and Nucor Corporation (NYSE:NUE) may be impacted. The stocks closed down yesterday, as AK Steel shed 7.7% of its value; Nucor was down about 4.1% while US Steel stock tanked 11.36%. Furthermore, the analyst elaborated that if Donald Trump wins in November, would increase the chances drastically that United States would impose stiff import taxes on all foreign steel products.