By TIM ROWDEN
President Donald Trump had barely uttered his latest brag about the success of his steel tariffs when U.S. Steel announced last week it is laying off nearly 200 workers at its Great Lakes facility in Michigan – for as long as six months.
The announcement knocked the chair out from Trump’s self-congratulatory statements just a week earlier at a Royal Dutch Shell plant in Pittsburgh, where a coerced audience of workers were told by their employer they wouldn’t be paid if they didn’t attend the Trump visit to the plant.
“Steel was dead,” Trump said. “Your business was dead. Okay? I don’t want to be overly crude. Your business was dead. And I put a little thing called ‘a 25 percent tariff’ on all of the dumped steel all over the country. And now your business is thriving.
“And I’ll tell you what,” he added, “Those steel mills — U.S. Steel and all of them, all of them — they’re expanding all over the place. New mills. New expansions. We hadn’t have — we didn’t have a new mill built in 30 years, and now we have many of them going up.”
Nearly all of that, of course, is false. U.S. Steel is investing $1 billion in its Mon Valley Works facilities in West Mifflin, Pennsylvania in an effort to lower its costs and better compete with its U.S. competitors, but there is no guarantee of new jobs there.
PLUNGING STOCK PRICES
U.S. Steel’s stock price has plummeted more than 70 percent since March of 2018, when Trump first announced tariffs on steel imports from China.
The tariffs provided a short-term boost in steel prices, but prices for hot-rolled steel coil are down about 37 percent from their 2018 peak, according to Reuters. Hot-rolled steel coil is the type of steel used in the construction and automotive industries, and the pace of growth in those industries is slowing.
The layoffs in Michigan are just the latest sign that Trump’s trade war with China may not be accomplishing all that he says.
U.S. Steel announced in June that it would suspend operations at two blast furnaces in Ecorse, Mich. and Gary, Ind., citing lower prices and softening demand.
Bank of America analyst Timma Tammers said Trump’s steel tariffs created a bubble in the market, leading to a “glut” of supply. U.S. steel capacity is set to increase by 20 percent around 2022, which will push down prices for steel commodities even further, a situation she refers to as “steelmageddon.”