The US has expanded steel and aluminum tariffs to cover over 400 products. Nucor Corporation, a leading American steel production group, is involved in the production of hot and cold rolled steels, manufacturing of steel products, and processing and transformation of steel and metal scrap. The group sells its products to various sectors, including automotive, household appliances, construction, and mechanical industries.
The United States has significantly expanded its steel and aluminum tariffs, now covering over 400 products, according to recent Customs and Border Protection bulletins [2]. This expansion, effective Monday, includes items such as locomotives, motorcycles, truck trailers, household appliances, and car parts, subject to a 50% tariff upon entry into the U.S. The tariffs are part of the Section 232 investigation by the Commerce Department, aimed at addressing national security concerns [2].
Nucor Corporation (NUE), a leading American steel production group, is well-positioned to benefit from these tariffs. Nucor specializes in hot and cold rolled steels, manufacturing of steel products, and processing and transformation of steel and metal scrap. Its products are used across various sectors, including automotive, household appliances, construction, and mechanical industries [1].
Warren Buffett’s Berkshire Hathaway recently invested $850 million in Nucor, boosting its stock by 0.87% on August 19, 2025 [1]. This investment underscores Nucor’s strategic positioning as a supplier of steel components for AI-driven data centers, a critical infrastructure for AI development. Despite broader steel industry challenges like rising production costs and margin compression, Nucor’s exposure to AI-driven demand and potential benefits from U.S. steel tariffs could support its long-term outlook [1].
Berkshire’s purchase of Nucor aligns with its recent focus on U.S.-based commodity companies with growth potential. While Nucor’s earnings have declined year-to-date due to cost pressures, its forward P/E ratio of 17.5 remains elevated. The market’s anticipation of tariff-driven pricing power and AI sector tailwinds may outweigh near-term operational headwinds [1].
Steelmaker Cleveland-Cliffs has also extended two- and three-year supply contracts for flat-rolled steel to tariff-sensitive U.S. automakers, further indicating the impact of steel tariffs [3]. These long-term agreements provide stability to automakers, shielding them from some effects of inflation and tariff volatility.
In conclusion, while the expanded steel and aluminum tariffs pose challenges, they also present opportunities for companies like Nucor. The strategic positioning of Nucor in the AI infrastructure sector and its alignment with Berkshire Hathaway’s investment strategy suggest a promising outlook for the company.
References:
[1] https://www.ainvest.com/news/warren-buffett-berkshire-hathaway-bets-850m-nucor-ai-infrastructure-demand-lifts-steel-giant-industry-struggles-stock-ranks-477th-0-2b-trading-volume-2508/
[2] https://www.supplychaindive.com/news/steel-aluminum-section-232-tariffs-expand-trump/757925/
[3] https://www.americanmachinist.com/news/news/55310327/us-steelmaker-automakers-in-long-term-supply-deals-cleveland-cliffs
