Why steel tariffs just get dumb and dumber
WASHINGTON>> The steel industry, shedding workers, shutting plants and bleeding red ink, pleaded with the federal government for tariffs on imports. As the government obliged, a young reporter on the steel beat for the Wall Street Journal cautioned that tariffs could “ultimately do the industry more harmthan good” because the real threat to big steel wasn’t foreign competition but changing technology.
That was 1992. The administration that imposed the trade barriers was George H.W. Bush’s. And the young steel reporter was me.
Twenty-six years later, what’s old is new again. The industry’s fortunes have waxed and waned with the economy and the price of steel. Trade protections came and went. But steel jobs continue to vanish. That’s because the job loss has almost nothing to do with imports.
President Trump, playing the charlatan, is telling steelworkers he’ll protect their jobs with his 25 percent tariff, made official Thursday, on all imports but those from Canada and Mexico. “We’re going to have a lot of great jobs … coming back into our country,” Trump promised.
Scott Sauritch, a local union president from Pennsylvania spoke next. He said his father, Herman Sauritch, had been a steelworker, but “during the ’80s, he lost his job due to imports coming into this country.”
“Well,” replied Trump, “your father, Herman, is looking down. He’s very proud of you right now.”
“Oh, he’s still alive,” Scott Sauritch corrected.
Not only did Trump kill off poor Herman Sauritch, but he’s also dooming the dreams of another generation of steelworkers. The elder Sauritch probably didn’t lose his job because of foreigners. Nor do today’s steelworkers.
The United States has been a net importer of steel for six decades. It imported more than 20 percent of steel in 1980s, 25 percent today. Imports in 2011 and 2017 were nearly identical.
But Americans consume far less steel — about half as much as in the 1970s — as improved technology means automobiles and other uses require less of it. And improved productivity requires dramatically less labor. Steel production is down by a third since the 1970s, but employment is down by about three-quarters.
These changes were well underway when I arrived in Pittsburgh in 1990. I toured the hulking industrial remains of the Monongahela Valley, and I still have over my desk a framed panorama, circa 1910, of mighty Homestead Steel Works, its furnaces blackening the sky. I visited steelworkers’ bars and wrote about a lost generation of industrial workers.
I also wrote about what was displacing them: “Minimills,” with their electric-arc furnaces that melted scrap steel, used only a third as many workers.
“Big steelmakers everywhere are finding that the economies of scale that helped them prevail since Andrew Carnegie’s day no longer favor them,” I wrote in 1993.
The entire industry has become less labor-intensive. The Associated Press reported last week that U.S. steel producers require only 1.5 person-hours to make a ton of steel, down from more than 10 in the 1980s.
As a result, the radical shrinking of the steel labor force has continued despite attempts to restrict imports: voluntary agreements in the 1980s, duties in the 1990s, more tariffs in 2002. But imports weren’t the problem.
The better answer, all along, has been for government to help steelworkers (and coal miners and other industrial workers who face a similar situation) to retrain and otherwise adapt to the inevitable.
Instead, Trump continues to lie to steelworkers by telling them their jobs are coming back. Dana Milbank is a Washington Post columnist.