Thomson Reuters

President Donald Trump announced he may slap even more tariffs on China, in light of its recent retaliatory tariffs.

The Dow Jones industrial average is getting whacked.

US Steel Company is also down considerably, unlike when it went up on Trump's first tariff announcement in March.

Stocks are falling Friday, after President Donald Trump threatened to escalate a brewing trade war with China.

Trump, in response to China's retaliatory tariffs, said Thursday night that "in light of China's unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products under which to impose such tariffs."

The Dow Jones industrial average fell as much as 435 points Friday, or almost 2%.

Somewhat counterintuitively, US Steel Company was down as much as 6% Friday, to an intraday low of $34.31. Tariffs on imported steel would boost prices of the commodity, which could lift the steelmaker's stock.

Indeed, after Trump's first announcement of steel and aluminum tariffs in early March, US Steel rose 6%, as investors cheered on the prospect that the company would enjoy more market share in the US and higher prices. Analyst Novid Rassouli of Cowen and Company told Business Insider that the tariffs could make US Steel Company's operating income "laughably high."

Despite Trump's double-down on tariffs, US Steel is down Friday. A Wall Street analyst, speaking to Business Insider on background, gave two reasons why that could be the case:

Trump did not specify, in his latest tariff announcement, that imported steel or aluminum would be part of the additional tariffs. Investors may have already factored in US Steel's price increases after the announcement of the original tariffs.

US Steel's decline Friday is part of the broader market's downswing. This price drops are reactionary, as investors continue to fear a potentially debilitating trade war. The analyst further noted that the price pressures are not carefully calculated, and that investors are simply fearful.

And Morgan Stanley analyst Piyush Sood told Business Insider, "The new China tariffs don’t do much to help since the US already has high tariffs on Chinese steel."

He added, "What’s exacerbating the move today is that steel prices (hot rolled coil) fell modestly today and yesterday" and that "typically these stocks trade up/down with steel pricing and sentiment."

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