Carl Icahn sells shares days before steel tariffs unveiled

Carl Icahn sells shares days before steel tariffs unveiled

Former White House adviser Carl Icahn last month sold 26 per cent of his position in a manufacturer that counts steel as a major input cost shortly before the Commerce Department recommended new tariffs on steel imports that prompted sharp declines in the stock. 

The high-profile Investor sold 589,381 shares in The Manitowoc Company for $31.3m from February 12 until February 22, according to filings from the Securities and Exchange Commission.

Those sales brought his stake below 5 per cent — removing the regulatory requirement to report sales and purchases — just four days before Wilbur Ross, commerce secretary, recommended tariffs on steel imports.

President Donald Trump this week vowed to implement the recommendations, sparking condemnation from America’s trading partners and triggering a global stock Market sell-off on concerns that the measures could escalate into a full-blown trade war.

Filings from Manitowoc, which manufactures and distributes construction equipment, say it uses steel from both international and domestic sources. Even so, its shares have dropped 14 per cent since February 26, the day Mr Ross made his tariff proposal. It has consistently lagged behind the performance of the large-cap S&P 500 index during that time. 

Mr Icahn also reported last month that he had sold 22 per cent of his stake in Freeport-McMoRan, a miner of copper, gold and molybdenum, which is an alloying agent used in steels. Freeport-McMoRan’s shares underperformed the S&P 500 on Friday, but fell just 1.2 per cent, while Manitowoc’s stock declined 3.7 per cent. 

The hedge fund manager’s February sales were the largest he has reported for either company’s shares since he first announced his stakes in 2015. 

He has adjusted his position in Freeport actively since he first purchased its shares, however, reporting a sale of 16 per cent of his stake in Freeport in June 2017, according to SEC filings.

Mr Icahn did not immediately respond to a request for comment. 

Mr Icahn resigned from his role as a special adviser on regulatory matters to Mr Trump last summer after concerns over potential conflicts of interest given his stake in refiner CVR Energy.

At the time the Investor wrote in a letter: “I never had a formal position with your administration nor a policymaking role. And contrary to the insinuations of a handful of your Democratic critics, I never had access to non-public information or profited from my position, nor do I believe that my role presented conflicts of interest.

“Indeed, out of an abundance of caution, the only issues I ever discussed with you were broad matters of policy affecting the refining industry. I never sought any special benefit for any company with which I have been involved, and have only expressed views that I believed would benefit the refining industry as a whole,” he said.

China has only made a measured response to the US administration’s move, but Europe and Canada have condemned the US vow to impose tariffs, which were made ostensibly on national security grounds.

Canada, which is the largest source of US imports of both aluminium and steel, said it would view any restrictions on its US exports as “absolutely unacceptable” and threatened to respond in kind. 

“It is entirely inappropriate to view any trade with Canada as a national security threat to the United States,” said foreign minister Chrystia Freeland. “Should restrictions be imposed on Canadian steel and aluminium products, Canada will take responsive measures to defend its trade interests and workers.”

The S&P 500 managed to claw back some of Thursday’s losses on Friday, but companies in the materials and industrials sector continued to sag lower.


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