Cleveland-Cliffs' $4 Billion 2027 Forecast Is Really a Bet on Tariffs Staying Put

The forecast is huge. The tailwind is political.

Cleveland-Cliffs told investors on Monday that it expects $4 billion in adjusted earnings in 2027. "Adjusted" is management's preferred profit measure, which strips out items it considers one-offs. Wall Street's consensus, meaning the average analyst estimate, was roughly $2.6 billion, according to FactSet data cited by The Daily Upside. The stock jumped more than 16% that day.

The company didn't pin the jump on some operational breakthrough. CEO Lourenco Goncalves credited trade policy directly, and investors should take him at his word. When a company tells you where the money comes from, believe it. Here, he's pointing at a tariff wall that keeps foreign steel out.

"Imports remain approximately 35%-40% below the level that existed before the implementation of Section 232." — CEO Lourenco Goncalves

What actually happened

Third-quarter revenue hit $5.6 billion. That's up 18% from a year earlier and the best quarter since early 2024. Adjusted earnings came in at $612 million. The company shipped nearly 4.2 million net tons of steel, up from 4 million, at an average of $1,177 per ton, up from $1,032.

The trajectory is steep. Cliffs earned a meager $37 million on an adjusted basis in 2025. It expects about $1.7 billion this year if its fourth-quarter projections hold. Now it's pointing to $4 billion the year after.

Goncalves tied it to Section 232, the national-security provision the White House used last year to put 50% tariffs on steel and steel-derived products. "Imports remain approximately 35%-40% below the level that existed before the implementation of Section 232," he said on a call with investors.

The takeaway is that this isn't a company slowly grinding out improvements. Its profits went from nearly nothing to billions within the span of a single trade policy.

Why it matters: this is pricing power on loan

Look at the quarter's numbers. Tons shipped grew about 5%. Price per ton grew about 14%. So more of the gain came from charging more than from selling more. That's what you'd expect from a tariff. When imported steel carries a 50% levy, domestic producers can raise prices without losing customers to cheaper foreign competition. That ability is called pricing power, and here Washington is handing it out.

Selling more steel helps, but a 5% bump in tons doesn't explain going from $37 million to a projected $4 billion. Price does most of that lifting, and those prices sit behind a policy. If the tariffs get cut, traded away in a deal, or carved out for certain products or countries, Cliffs loses some of its ability to charge more. A multi-year forecast built on a policy is only as durable as the policy.

The auto angle adds a second dependency. Goncalves called it a "slap in the face" that GM builds its Chevy Trax crossover in South Korea. He also complained about Ford's "annoying" decision to give the F-150 an aluminum body. Read that as a sales pitch dressed up as a grievance. He says there's more room to grow if automakers start "playing ball." That means moving production home and choosing steel, and those are decisions Cliffs doesn't control.

The bigger picture: Wall Street is pricing in industrial policy

Cliffs isn't the only company whose outlook leans on Washington's priorities. Also on Monday, JPMorgan said its Security and Resiliency Initiative financed $230 billion of projects in its first year. The initiative is a 10-year, $1.5 trillion plan to fund industries critical to economic and national security. It also includes $10 billion in direct startup investments, and at least half of that has already gone out the door. Jamie Dimon insists the effort is "100% commercial."

The two stories don't connect directly. Nothing in the reporting says JPMorgan is financing Cliffs. What they share is an assumption: that national-security-driven policy will stick around long enough to make money on.

That assumption is the thing to watch. Here are three tests:

- **Trade talks.** A Trump-Xi summit is coming up with the trade war on the agenda. Any broader shift in trade policy is worth watching. - **New domestic competition.** A proposed Iowa mill, billed as the biggest steel plant in US history, is waiting on $1.4 billion in state incentives, though legislators were told it's "not a done deal." More domestic supply could eventually eat into the pricing that tariffs protect. - **Detroit's sourcing.** Watch whether GM and Ford actually change where they build and what they build with.

The practical read: if you own Cliffs at these levels, you're less a steel investor than a tariff-durability investor. That can be a fine bet. Just know you're making it.