Markets: Trump’s trade diplomacy style is a confidence killer. Our nascent optimism of the past two weeks that we were beginning to see a recovery in pricing was dashed last week and this weekend by news that the trade war was heating up and the surprising upward movement of the US dollar in reaction to a rate cut. Over the weekend, China announced that it was devaluing its currency to offset the impact of US tariffs, which we believe will only work to further strengthen the dollar. In addition, a hard Brexit threatens the Euro, which is closely correlated with steel pricing in the US where a lower Euro/USD usually means lower steel pricing. In the future, we’d expect a similar relationship between the Chinese RMB and US steel prices to develop. The argument that the announcement of 10% tariffs this weekend is a negotiating tactic and could be withdrawn by the September 1st date of enactment should also be considered, but investors will understandably dismiss it as a positive since it will increase volatility further. For now, the trade uncertainty is keeping investors and corporations on the sidelines, which is depressing steel demand. That argues for a risk-off posture until a different path becomes apparent.