The chief executive of a major United States steel company says tariffs on foreign steel are working.
"We're very pleased with the results that are happening as a result of the tariffs," John Ferriola, chairman and CEO of Nucor, told CNBC's Jim Cramer on "Mad Money" on Thursday evening.
"The anticipated response was domestic capacity coming on line to replace the lower imported steel," he said. "That's exactly what happened."
President Donald Trump's administration currently imposes 25% tariffs on imported steel from most countries, including China. The administration lifted similar tariffs against Canada and Mexico in May.
"Last year, demand was very strong, and as a result people were afraid they wouldn't be able to get the steel they needed when imports went down. The domestic industry, Nucor included, responded by making sure that we gave our customers what they needed to keep our customers happy," Ferriola said, adding that demand for steel remains strong.
On Thursday, however, Nucor reported weaker-than-expected fiscal second-quarter profit and revenue, with per-share earnings of $1.26 on sales of $5.9 billion in revenue.
Citing weather issues and bloated inventories for the weakness, Ferriola said the company is seeing a "more normalized ordering pattern" now.
Ferriola said Nucor has recently introduced price hikes on steel sheet products and that the tariffs are effective in keeping Chinese companies from flooding the market and lowering the price.
The price of steel is actually lower for downstream customers than before the tariffs went into effect, he said.
"We said all along last year that this is an issue of supply and demand. It got a little bit out of whack last year, now it's back normalized and pricing is normalized also," he added.
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