U.S. in­dus­tries that ply steel leery of Trump’s tar­iff threat

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - DON LEE

WASH­ING­TON — Pres­i­dent Don­ald Trump was stand­ing on the bank of the Ohio River, and as barges loaded with West Vir­ginia coal floated by, he noted that half the United States’ steel is pro­duced within 250 miles and told the crowd that soon “the steel folks are go­ing to be very happy.”

Within that same dis­tance lies the bulk of the U.S. auto in­dus­try, which the pres­i­dent also has promised to pro­tect. But car­mak­ers are dread­ing what Trump ap­par­ently was al­lud­ing to: plans to im­pose sig­nif­i­cant puni­tive tar­iffs or quo­tas on steel im­ports.

Trump has promised to crack down on un­fair for­eign traders and re­store the for­tunes of Amer­i­can man­u­fac­tur­ing. Few in­dus­tries are as im­por­tant as steel­mak­ing, and Trump sees steel as an em­blem of in­dus­trial power as well as be­ing vi­tal to the coun­try’s na­tional se­cu­rity.

But the pres­i­dent faces a co­nun­drum: Mak­ing good on his early June pledge in Cincin­nati may help do­mes­tic mills by re­strict­ing for­eign steel and rais­ing U.S. steel prices. But that same ac­tion al­most cer­tainly will mean higher costs for Amer­i­can mak­ers of cars, ap­pli­ances, ma­chin­ery and con­struc­tion ma­te­ri­als, and for many other

man­u­fac­tur­ers that cut, bend and oth­er­wise fabri­cate steel.

That could lead to higher prices for con­sumers and job losses.

“I’m sym­pa­thetic to Amer­i­can steel mills, but if they pro­tect do­mes­tic steel, they’re go­ing to be hurt­ing steel fab­ri­ca­tors, which em­ploy a hun­dred times more peo­ple,” said Drew Green­blatt, chief ex­ec­u­tive of Bal­ti­more-based Mar­lin Steel Wire Prod­ucts, which buys only U.S.-made steel. Green­blatt has been pay­ing more for the metal since Trump’s elec­tion, as prices have risen partly in an­tic­i­pa­tion of com­ing mea­sures.

Oth­ers, such as Fon­tana, Calif.-based Cal­i­for­nia Steel In­dus­tries and the Port of Los An­ge­les, op­pose blan­ket re­stric­tions on steel im­ports,

say­ing the kinds of slab steel that are im­por­tant for their busi­nesses and em­ploy­ment are not eas­ily avail­able from do­mes­tic pro­duc­ers. Nor do an­a­lysts think tar­iffs will ad­dress the prob­lem cre­ated by ex­cess steel pro­duc­tion in China that has caused a global glut and lower prices.

None of that may mat­ter to Trump and his trade of­fi­cials.

Two months ago, the pres­i­dent or­dered a study of for­eign steel ship­ments, and its find­ings and rec­om­men­da­tions could be is­sued soon, giv­ing him the green light to put his “Amer­ica first” pol­icy into ac­tion and re­make a global trad­ing sys­tem he thinks has un­der­cut the U.S.

“It’ll be the first big one,” said Wil­liam Rein­sch, a vet­eran trade spe­cial­ist in

Wash­ing­ton, D.C. Un­til now, Trump’s tough talk on trade has been just that, mostly talk, Rein­sch said.

If Trump fol­lows through as ex­pected, his­tory sug­gests U.S. steel prices will go higher, do­mes­tic steel pro­duc­ers will be hap­pier and some work­ers laid off from mills will be called back — at least for a while.

U.S. steel man­u­fac­tur­ing has gone through waves of re­struc­tur­ing and is more pro­duc­tive to­day, but the in­dus­try shed 14,000 steel jobs in the past two years, a prod­uct of ex­cess global pro­duc­tion and un­fair trade, ac­cord­ing to the Amer­i­can Iron and Steel In­sti­tute, a trade group for 18 pro­ducer com­pa­nies. The in­dus­try now em­ploys about 140,000, the group said.

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