“Our steel industry is coming back at a level that nobody thought possible. Factories are opening up all over,” President Donald Trump said at the second annual “Made in America” event on July 23.
“They are helping re-establish two vital industries for our national security.”
“We were being dumped on,” Trump said. “They were dumping all over this country.”
Steel dumping is a major problem worldwide. The United States and Europe accuse China of selling its steel at a loss so that other producers cannot compete.
Through state subsidies, China allows its manufacturers to produce far more steel than the global demand. And much of the excess steel ends up in the United States, where it is sold at rock-bottom prices, according to experts. Excess steel, therefore, creates a destructive ripple effect for domestic producers and workers.
Tens of thousands of American workers have faced layoffs and dozens of factories have been shut down since 2000 because of imports, according to the Alliance for American Manufacturing (AAM), a nonprofit organization formed by manufacturers and the United Steelworkers.
With the recent tariffs on imports, the steel industry is seeing some positive signs, said Scott Paul, president of AAM.
“There have been, in steel alone, about 3,500 to 4,000 workers that have been called back to the job, some after several years of unemployment,” he said.
The order books of domestic producers are busy, he added. “The relief is certainly having its intended effect for the steel industry, so far.”
In April last year, Trump ordered an investigation into whether imports of steel and aluminum posed a threat to national security. The U.S. Department of Commerce carried out the investigation under Section 232 of the Trade Expansion Act of 1962.
“To supply the United States military with advanced metals and U.S. industry with the steel and aluminum needed for critical infrastructure, the American manufacturers providing them must be commercially viable,” Ross stated. “These companies cannot stay in business only as military and critical infrastructure contractors; the mills and smelters cannot continue to operate at reduced capacity and survive.”
As a result of tariffs, U.S. steel prices rose sharply in March. Although the prices have come down in recent months, the ongoing uncertainty still creates a risk for industries that depend on steel including automotive, aerospace, manufacturing, and construction.
There’s certainly been a spike in steel prices, Paul said.
“I’m sure that’s been very frustrating for steel consumers ... but I think it will settle down to more of a realistic market price,” he said.