US Steel has announced that it will temporarily suspend production at two U.S. steel mills despite the Trump administration's increase in import tariffs as the steel industry, which enjoys broad federal support, shows signs of weakening.
On Tuesday, US Steel said it would temporarily halt operations at a blast furnace near Detroit and in Gary, Indiana, on the shores of Lake Michigan. In addition, the company will suspend steelmaking in Europe.
The closure goes against the colorful description that President Trump has offered for the steel industry. On Tuesday night in Orlando, when he officially announced he was running for re-election, Trump talked about helping the steel industry through the use of import tariffs.
"Our tariffs bring American steel mills to life, you know that," he said.
The moves come amid wider concerns about a slowdown in steel industry growth that threatens to displace a key economic priority for the Trump administration. Despite the initial increase in tariffs, steel prices fell sharply amid weakening demand from key consumers, including the automotive, energy and agricultural industries, said Phil Gibbs, Metals Analyst at KeyBanc Capital Markets.
Hot rolled steel prices - a key indicator of market health - have fallen from their peak last year from $ 900 a tonne to less than $ 900 per tonne, according to James Moss, a steel industry consultant at Pittsburgh-based First River Consulting. than $ 600 per ton.
Last year, Trump imposed import tariffs of 25 percent on steel imports and 10 percent on aluminum imports, citing national security concerns. Tariffs remain in effect for China and most countries, although they were canceled a month ago for Canada and Mexico.
Trump's tariffs helped revive the steel industry in 2017 and 2018, leading to higher profits and plans for companies to restart old factories. In a favorable business climate, contract negotiations last year saw US steel workers receive the largest pay increases in years.
Trump celebrated the improvement in the steel industry under his leadership, calling it a key success story for his tariffs. He tweeted last month that in just a year, his tariffs have restored the US steel industry and it is “thriving.”
But steel prices have since plummeted from 2018 to 2019, in part due to weakening demand in Europe as well as weakening demand in the United States. ArcelorMittal also announced last month that it will stop smelting at steel mills in Europe.
According to industry analysts, Trump's tariffs could help crush the competition facing US steelmakers in domestic markets, but Chinese steel could still drive prices down in Europe and other competitive markets.
According to the report of the Institute of International Economics. Peterson, a free-market think tank, Trump's steel tariffs cost American consumers and businesses more than $ 900,000 a year.
