President Trump’s second-term trade agenda has hardened into a structural policy regime, with U.S. steel imports sitting at their lowest levels since the global financial crisis. That backdrop has turned the under-$40 corner of the industrial market into one of the most asymmetric setups in the market, where a single multi-quarter pricing cycle can re-rate a stock several times over. For retail investors scanning the wreckage of 2025’s commodity selloff, the names worth a second look share three traits: domestic production, automotive exposure, and direct leverage to tariff enforcement.
With that in mind, here is one industrial stock trading well under $40 that fits the Trump tariff supercycle thesis cleanly.
Cleveland-Cliffs (NYSE: CLF)
Cleveland-Cliffs (NYSE:CLF | CLF Price Prediction) is the largest flat-rolled steel producer in North America, with leadership positions in automotive, electrical, stainless, and plate steel.
Shares recently closed near $12. The stock sits 84.88% above its level a year ago, though it remains down 9.79% year to date. For a retail investor, that combination of a near-$12 handle and a $6.4 billion market capitalization means meaningful upside is achievable without the share price needing to do anything heroic.
The fundamentals are inflecting. Q1 2026 revenue came in at $4.92 billion, up 6.33% year over year and beating the $4.79 billion consensus. Adjusted EPS of -$0.40 beat the -$0.416 estimate, and adjusted EBITDA swung to +$95 million from -$179 million a year earlier, despite an $80 million one-time energy cost from extreme cold weather. The average selling price climbed to $1,048 per net ton, and shipments hit 4.1 million net tons.
Wall Street remains split. The consensus 12-month target sits at $10.50, with one strong buy, one buy, nine holds, and one strong sell. Morgan Stanley keeps an Overweight rating with a $12 target, while bears at JPMorgan moved to $10. Forward earnings are projected to swing from a loss to $0.30 per share next year.
The bull case is straightforward. CEO Lourenco Goncalves put it plainly: “Trade enforcement in the United States is working exactly as intended, with steel imports at their lowest levels since the global financial crisis.” Cliffs has signed multi-year contracts with all major automotive OEMs, was just named 2025 GM Supplier of the Year as the sole North American steel producer honored, and inked a three-year Palantir AI partnership the CEO called a “game changer.” The three headwinds that crushed 2025 (weak automotive production, a value-destructive slab supply contract, and an adverse Canadian market) have all eased, and management guides to healthy positive free cash flow in Q2 2026 with a $500 million EBITDA tailwind from the expired slab contract.
The risk that cuts against the thesis is leverage. Total debt stands at roughly $7.76 billion against just $45 million in cash, and FY2025 closed with a $1.478 billion net loss. Q1 free cash flow was -$477 million, and the POSCO partnership negotiations stalled on valuation disagreements. The thesis depends on tariff enforcement remaining intact and automotive demand holding.
With pricing power, policy tailwinds, and a sequential earnings ramp visible quarter by quarter, Cleveland-Cliffs looks like the cleanest pure-play on the tariff supercycle available under $40.
The Bottom Line
Cleveland-Cliffs carries real balance sheet risk alongside its tariff-driven upside, and the consensus rating across major brokerages currently sits closer to neutral than bullish. Investors should weigh leverage, customer concentration, and trade policy durability against the operating inflection, then size positions according to their own risk tolerance and time horizon.
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