Steel tariffs hammer longshore workers
Trump-imposed import taxes protecting U.S. manufacturers hurt dock operators
Antonio and Kawana Spivey have worked at the Port of Houston for four years, unloading steelladen ships that come from all over the world. But recently, the ships have come far less frequently, cutting the married couple’s monthly hours and earnings by some 35 percent.
Starting in late June, that loss of income forced them to tap into $12,000 they had started saving earlier this year to buy a home. “We depleted it all the way,” said Antonio Spivey.
The Spiveys are among the longshore workers whose livelihoods have been affected by the steel tariffs imposed by President Donald Trump, another example of how the protection of one industry and its workers can reverberate through the economy to hurt others. In the three months between July and September, imports of steel and iron, as well as products made of them, have plunged 23 percent at the Port of Houston from the same period a year earlier, according to the Commerce Department.
Meanwhile, the longshore union estimates that its members’ hours unloading steel, pipe and coil — which had only recently recovered following the oil bust that ended in 2016 — have plummeted 33 percent in the fiscal year that ended Sept. 30.
“It’s economic warfare,” said Charles Montgomery, vice president of the executive council for the International Longshoremen’s Association. “My guys are being a casualty.”
Trump, who made protecting U.S. manufacturing a key promise of his campaign, imposed the first round of tariffs in March, arguing that foreign steelmakers, subsidized by their governments, were dumping cheap steel on the U.S. market and undercutting U.S. companies. The administration initially placed 25 percent duties on steel imports from the vast majority of countries, including China, Japan, Turkey, Thailand and Vietnam, then followed up in June by extending the tariffs to Mexico, Canada and the European Union.
Houston is the country’s top port for receiving steel. And the main categories affected by tariffs — which include pipe for drilling, rebar to reinforce concrete and coils that are un-
wound and then made into finished products — saw combined imports fall 9 percent to 5.5 million tons through the first nine months of this year, according to the Commerce Department.
Free-trade advocates have argued that industries that rely on imported steel have far more jobs than the companies that make it in the United States. The American Institute for International Steel, an industry group that advocates for free trade of steel products, claims there are 10 times as many maritime jobs in the steel supply chain than jobs in U.S. steel production.
Local dock workers and stevedoring companies hired to unload vessels are the first to handle the imported slabs of steel and drill pipe as they enter the country. At the Port of Houston, steel and steel products are unloaded by cranes and moved to a laydown or storage area until they are transported to the next link in the supply chain. When times are good, such as last year, when the oil and gas industry gobbled up steel for drilling, the storage areas are stacked with steel.
But on a recent fall day, Montgomery, the longshore union official, noted the emptiness of the storage areas at the Turning Basin, one of four public terminals operated by the Port of Houston Authority where steel is unloaded. A dozen fewer ships called on the Turning Basin in October compared to a year earlier. Through the first 10 months of the year, 34 fewer ships have docked there compared to the same period in 2017.
“That looks like it is going out of business,” he said, pointing to one of the storage areas. “There are a lot of areas that are usually brimming with steel, and they’re not.”
The Turning Basin is the only local terminal where union longshoremen unload steel. Montgomery, 67, has worked on the waterfront as a longshore worker and union official for 50 years. As he looked at the empty laydown areas, he was reminded of the hard times that began in 2002, when President George W. Bush imposed his own steel tariffs.
Over the next year, steel moving across the public docks operated by the Port of Houston Authority plunged more than 20 percent. Hours were cut. People with less seniority couldn’t find work. Some, including Montgomery, went to Corpus Christi, where the military work provided hours.
Dave Morgan, now president of Houston stevedoring company Cooper/Ports America, oversaw a different company’s New Orleans operations in 2002 when the steel tariffs hit. He recalled the volume of steel entering the port plunging by more than 30 percent, which dramatically cut the hours of longshore workers.
“That’s what we’re afraid of this go-around if something isn’t negotiated,” Morgan said.
So far, his company’s overall steel volumes in Houston have yet to be affected by the Trump tariffs, but Morgan said he’s beginning to see worrisome signs. Japanese steel imports have slowed significantly, falling to about 9 percent of the steel his company handled in the third quarter from 16 percent at the end of last year.
How fast and how far steel imports may decline remains unclear. The Port of Houston Authority said volumes handled on the four public docks it oversees are up 27 percent in the first 10 months of the year compared to the same period in 2017. Those figures don’t include the many private docks that operate along the Houston Ship Channel, which would be included in the broader Commerce Department statistics.
In addition, the port’s figures were bolstered by reoccurring steel shipments that recently shifted from private terminals to those operated by the port.
“Even though we haven’t seen the downturn yet, there’s a good possibility that it’s going to slow down,” said Port of Houston Authority Executive Director Roger Guenther. “What’s going to happen in 2019 is kind of unknown right now.”
Skip Hastings, commercial director for Kansasbased Watco Cos., is expecting a steel slowdown. Watco owns Greens Port Industrial Terminals on the Houston Ship Channel, which has docks for unloading massive vessels and barges, storage yards for the various commodities and 3.3 million square feet of indoor warehouse space. Watco, which uses nonunion dock workers, also has terminal operations for handling and storing steel commodities at the Turning Basin.
Hastings first noticed steel shipments were slowing in June, and he’s expecting a larger drop due to a sharp decline in imports from South Korea, which avoided Trump’s tariffs by agreeing to limit its steel exports to the United States. South Korean vessel lines and steel mill operators recently told Watco executives to expect certain steel items coming into Houston to plunge by up to 50 percent throughout 2019.
Hector Duran has worked on the public docks for 10 years. A year ago, Duran had all the work he needed. Now, he finds himself standing in line at the union hiring hall hoping to land a job until the stevedoring company he usually works for gets another ship of steel to unload.
Duran is not sure when the work will pick back up, and that makes him nervous.
“Everything,” he said, “depends on the metal.”