Trade

American Steel is In The Toilet

JM Ashby
Written by JM Ashby

United States Steel announced last night that they will lay off hundreds of workers at one of their facilities in Michigan where production will cease and, by the company's own admission, there's reason to believe those jobs are never coming back.

Even beyond the company's admission that lay-offs could last at least six months if not longer, the current state of the American steel industry does not give us much reason to think the losses won't be permanent.

Shares of U.S. Steel have lost nearly 75 percent of their value since Trump first imposed tariffs on foreign steel and aluminum in the spring of 2018.

Domestic steel prices did rise in the immediate aftermath of Trump’s tariffs. But they have fallen dramatically amid improved supplies and weakening demand from the auto and farm machinery sectors.

Prices of hot-rolled coil are down nearly 37% from their 2018 peak.

U.S. Steel’s stock price has plunged 73% since March 1, 2018, when Trump announced his decision to crack down on foreign imports.

And why do we have "weakening demand from the auto and farm machinery sectors?"

It's Trump's trade war.

This is why industry trade groups should not ask the Trump regime for anything because what he gives you will be accompanied by a side order of poison. The American metal industry asked for tariffs on foreign metal and they got them, but each industry that asks for tariffs makes it easier and further justifies Trump's future decisions to impose tariffs; tariffs that have all led to retaliation.

The metal industry's desire for tariffs led to Trump's wider trade war that has ultimately cut global demand for metal more than the original tariffs increased the value of metal.

What would stimulate demand and drive employment in the metal industry?

It's not tariffs that artificially increase the value of metal and funnel money into the pockets of wealthy shareholders. What would actually drive demand is a trillion dollar infrastructure spending initiative that won't be possible for the foreseeable future because Trump and GOP blew $1.5 trillion on tax cuts for people who were already the richest people in the world.

If the predominately-white labor unions who make up the bulk of labor activism in the metal industry don't wake up and smell the shitshow, they deserve what's coming. And that's being generous. It would be justifiable to say they deserve this for supporting Trump in the first place; for believing he was going to bring them anything but ruin.

Everything Trump touches turns to shit.

  • Badgerite

    Say what you will about Facebook, but it was network TV that sold the public this awful clown as a ‘successful’ and ‘serious’ business person in the first place. I always hated the Apprentice because it was people doing ridiculous go-fer stuff dressed up as somehow great industry at work. It was and is to this day, ridiculous. What we see now is the fraudulent enterprise that is and was trump inc. without any of the editing and window dressing. Of course he’s a racist.
    And always has been. And he cares about Israel not one wit.

  • Draxiar

    He once said that farmers were patriots for taking the hit on their exports due to tariffs. I’m betting that he’ll say the same for the steel industry. It won’t take long before they both realize that you can’t feed your kids or pay your bills with “patriotism”.

  • Aynwrong

    Schadenfreude aside, this is more than a little unnerving.

  • muselet

    The steel industry is just more collateral damage from Donald Trump’s trade wars.

    It’s too bad company executives will never acknowledge that.

    –alopecia

  • gescove

    When Republicans gain power, the economy tanks. Every. Flipping. Time.