“It hasn’t turned out as it might have intended,” said Timothy Triplett, senior editor at Steel Market Update, quoted in a new Los Angeles Times article on the Trump steel tariffs.
Not turning out as intended might be the understatement of the year. First, Trump's Section 232 steel tariffs first incited panic. Then consumers placed new orders fearing interruptions and steel price increases, the LA Times reports:
It was an instant bonanza for domestic steel producers. With much fanfare, some announced ambitious expansion plans. United States Steel Corp. even fired up a pair of long-idled blast furnaces in Granite City, Ill., and Trump seized the occasion to deliver a rousing speech at the plant about the industry’s resurgence.
Today, the steel industry tells a different story. Steelmakers that once supported Trump's steel tariffs have had a change of heart, and steel production has consecutively declined in recent weeks. As a result, several layoffs and cutbacks from steelmakers have dogged the headlines.
Executive director for the Coalition of American Metal Manufacturers and Users, Paul Nathanson said it best: "A tariff is a tax, and if you tax an item the price of that item goes up, resulting in purchasers buying less of that item. And that’s what’s happening to the domestic steel industry today."
Don Lee, staff writer for the LA Times, puts it in greater perspective:
Emboldened by tariffs, the president’s pro-business rhetoric and tax cuts that poured money into corporate coffers, steel companies went on a spending spree that added production capacity to a domestic market that didn’t need it. Historically low interest rates added to the steel industry’s enthusiasm for investing in new and improved plants and equipment.
At the same time, Trump’s penchant for on-again, off-again trade warfare contributed to a general slowdown of the global economy. U.S. manufacturing, which along with the construction sector is the principle consumer of American steel, is currently in recession.
Head over to the latimes.com to read the complete article on how the Trump steel tariffs have affected the industry. Visit our steel market reports section on snipsmag.com to follow more of our coverage on the domestic steel market.