Trump’s 50% steel tariff could see prices tank in Europe — and soar in the U.S.

U.S. President Donald Trump surprised markets yet again with an abrupt announcement on Friday that he will

She agreed that some low-cost Asian-origin steel destined for the U.S. will be diverted to Europe. “Even with the EU and U.K.’s trade defense measures, this could undermine domestic producers’ attempts to maintain profitability.”

Conversely, U.S. steelmakers may benefit from higher selling prices if further increases now occur, even as costs increase for U.S. manufacturers and stoke inflation, she added.

It remains unclear what Trump’s latest jolting of the market could mean for the U.K., which announced the outline of a U.S. trade deal in May but has not yet secured an exemption from steel tariffs.

Gareth Stace, head of industry body UK Steel, said in a statement that domestic steel firms were “fearful that orders will now be canceled, some of which are likely being shipped across the Atlantic.”

Overall, Trump’s latest announcement adds to the growing headache for almost all businesses as a result of volatile trade policy, said CRU’s Josh Spoores.

“I don’t expect this to be policy in three months. Even three weeks it’s unclear,” he told CNBC.

“These tariffs are at such a high level and in the U.S. they will affect a massive community of manufacturers which make a huge contribution to GDP and employment, so there will be lobbying on this.”

— CNBC’s Ganesh Rao contributed to this story.