The Steel-Wise Trade Play: How U.S.-EU Calm Spells Gold for Metals & Logistics

The U.S.-EU trade war that seemed inevitable just months ago is now sounding more like a rumble than a roar. Poland’s Trade Minister Michał Baranowski isn’t just resisting American tariffs—he’s turning them into a bargaining chip to secure better terms for Europe. And that means one thing for investors: now is the time to pounce on industrial metals and logistics stocks before the market catches on.

Let’s break this down.

The EU’s Unified Stance = Lower Tariff Volatility

Baranowski’s recent remarks, delivered during Poland’s EU Council presidency, made it clear: Europe won’t settle for a watered-down trade deal like the U.S.-UK agreement. The EU is demanding terms that exceed the 10% baseline tariffs on metals and autos, while threatening retaliation targeting $135 billion in U.S. exports. This isn’t posturing—it’s a strategic move to force the U.S. to the table.

The result? Reduced uncertainty for sectors like steel and logistics. A full-blown trade war (with 25% tariffs on all imports) would slice Poland’s GDP by just 0.43%, per the Polish Economic Institute. That’s a drop in the bucket compared to the 2-3% declines seen in past crises. Translation: investors can finally trust that supply chains won’t collapse.

Buy the Dip in Industrial Metals—Now

The U.S. has long weaponized tariffs on steel (25%) and aluminum (10%), but EU pushback is flipping the script. Here’s why metals stocks are primed to surge:
1. EU’s leverage: Europe’s $116 billion retaliatory threat isn’t just bluster—it’s a credible counterweight to U.S. protectionism.
2. Poland’s pivot: With 57% of its exports to the U.S. moving indirectly through other nations, Polish metals producers are already hedged against direct tariff hits.
3. Valuations are dirt-cheap: Key players like Alcoa (AA) and ArcelorMittal (MT) trade at 7-8x earnings, near 10-year lows.

Logistics Firms Are the New “Safe Havens”

While metals are the headline, don’t overlook the unsung heroes of global trade: logistics companies. Reduced tariff volatility means smoother supply chains, and firms like C.H. Robinson (CHRW) and Expeditors (EXPD) are poised to capitalize. These stocks are trading at 15-20% below their 2024 highs, despite handling 80% of cross-Atlantic freight.

The Polish Economic Institute’s data shows logistics exports could drop 1.5% in a “severe” trade scenario—but that’s a best-case scenario now that both sides are negotiating. The reality? Logistics firms are buying back shares and boosting dividends as risks fade.

Beware the Tariff Landmines

Not all sectors are safe. Auto manufacturers and Chinese-exposed metals (like rare earths) remain on shaky ground. The U.S. hasn’t budged on tariffs tied to China’s influence in Europe, and Hungary’s “red line” stance on decoupling from Beijing means avoid anything linked to Sino-European trade disputes.

Bottom Line: Load Up on Logistics & Steel—But Keep an Eye on the Floor

This isn’t a “buy and hold” moment—it’s a sector rotation play. Use dips below $35 for AA or $110 for CHRW as entry points. And don’t forget: if the U.S.-EU deal collapses, short-term pain could create a better buying opportunity.

The message from Warsaw is clear: trade war fears are overdone. The calm after the storm is here. Are you ready to profit?

—Jim

Action Items:
1. Buy AA on pullbacks below $35.
2. Accumulate CHRW dips to $105-110.
3. Avoid autos (F, GM) and rare earths (LYB, MMC) until China-U.S. tensions cool.