Bani Sapra and Paul Wiseman
AP Business Writers
WASHINGTON (AP) — President Donald Trump’s decision last year to tax imported steel was met by both jeers and cheers.
Its goal — to raise steel prices — threatened to hurt the legions of U.S. manufacturers that depend on steel. But at least it would benefit U.S. steel companies and the Americans who work for them. That was the idea, anyway.
Yet Trump’s 25% tariffs, it turns out, have done little for the people they were supposed to help. After enjoying a brief tariff-induced grace period last year, American steelmakers are reeling. Steel prices and company earnings have sunk. Investors have dumped their stocks.
The industry has added just 1,800 jobs since February 2018, the month before the tariffs took effect. That’s a mere rounding error in a job market of 152 million, especially during a time that saw U.S. companies add nearly 4 million workers. Steelmakers employ 10,000 fewer people than they did five years ago.
“Even with these very high tariffs, the industry has not been able to take advantage,” said Christine McDaniel, a senior research fellow at Mercatus Center, an economic think tank at George Mason University.
Trump’s pledge to rejuvenate the steel industry had helped him win votes in the 2016 election in such states as Ohio, Pennsylvania and Wisconsin. His inability to deliver a boom for the industry raises doubts about how he’ll fare in those states in 2020. Voters will be weighing whether to move on from
Trump or reward him for at least taking the fight to foreign steel mills.
The causes of steel prices’ decline range from low demand — the result of a weakening global economy — to the industry’s own rush to boost production after Trump’s tariffs took effect.
For the first few months after the new duties were in place, steel prices did rise. The price of a metric ton of hot rolled band steel hit $1,006 in July 2018, according to the SteelBenchmarker website, which tracks steel prices. Since then, it has plunged to $557 — lower than what it was before the tariffs.
“Over time, (pricing has) come down, down, down, down, down,” said Mark Lash, president of United Steelworkers Local 1066 in Gary, Indiana, which represents about 1,400 workers at US Steel’s plant there.
The president’s campaign against foreign steel has been overshadowed by his trade war with China over Beijing’s industrial policies, which are widely seen as predatory. But the steel tariffs came earlier and demonstrated Trump’s willingness to overturn seven decades of U.S. free-trade policies and aggressively target imports.
By taxing imported steel, Trump risked raising costs for the many U.S. industries that use the metal, straining ties with American allies and defying the limits of his authority to punish trading partners.
The desire to protect steelmakers was in some ways odd. After all, the economic benefits of protecting steel are modest: The industry employs just 142,000 people. By comparison, Home Depot alone employs 400,000. And the newest steel plants are highly automated. They don’t need nearly as many workers as steelworks of the past did, so the possible job gains are li