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Cleveland-Cliffs (NYSE:CLF) exploded in early tradingup 22.2% at 12.14pm todayafter Donald Trump proposed doubling U.S. tariffs on steel and aluminum to 50%. The move jolted the entire sector, pushing names like Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD) up nearly 8% and 9.3%, respectively. It's a clear signal the former president is ready to reignite his protectionist playbook if re-elected. But while the market responded instantly, the broader indices didn't cheerDow (DIA), NASDAQ (NASDAQ:QQQ), all slipped as investors weighed the potential for renewed trade tensions and higher consumer prices down the line.
For Cleveland-Cliffs, this tariff boost couldn't have come at a more sensitive time. Despite the rally, the stock is still down nearly 60% over the past yearhit by soft demand, especially in autos, and a string of internal restructurings. The company's pivotshuttering facilities, slashing capex, and refocusing on core operationsmay improve its margin profile if steel prices stay elevated. But there's no escaping the fact that Cliffs remains heavily exposed to political winds and macro shifts. If foreign governments respond in kind, or if higher prices choke off end-market demand, the upside could evaporate fast.
Investors now face a tricky setup. Yes, the momentum is real. And yes, policy headlines like this can reshape the near-term landscape. But the deeper story here is still one of volatility and uncertainty. This isn't a set-it-and-forget-it stockit's a name that demands timing, discipline, and a close eye on both Washington and Wall Street. For those willing to play the cycle, CLF could offer tactical opportunities. For everyone else, this may be a reminder that tariff trades cut both ways.
This article first appeared on GuruFocus.