Trump Tariffs Help Sink US Steel: Investigating a Trump "Big Win"

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US Steel wanted Trump to put tariffs on Chinese steel imports. The company is not at all pleased with the results.

Big Win!

Investigating the Big Win

Bloomberg reports Trump's Tariff Twist Cost U.S. Steel $5.5 Billion.

President Donald Trump’s tariffs on foreign steel have sped the decline of some of the U.S. mills he vowed to help.

Exuberance over the levies dramatically boosted U.S. output just as the global economy was cooling, undercutting demand. That dropped prices, creating a stark divide between companies like Nucor Corp., that use cheaper-to-run electric-arc furnaces to recycle scrap into steel products, and those including U.S. Steel Corp., with more costly legacy blast furnaces.

Since Trump announced the tariffs 16 months ago, U.S. Steel has lost almost 70% of its market value, or $5.5 billion, and idled two American furnaces in mid-June that couldn’t be run profitably at the lowest prices since 2016. Meanwhile, Nucor, down around 20%, has touted $2.5 billion in expansion projects.

Last July, Trump stood on a makeshift stage at a U.S. Steel mill in Granite City, Illinois, and beamed as workers cheered the tariffs. At that point, the company had already restarted one of two blast furnaces at Granite City, and vowed the second would soon be brought online.

“Workers are back on the job, and we’re once again pouring new American steel into the spine of our country,” Trump said during the hour-long program. “U.S. Steel is back.”

“Less efficient capacity should go away, but there is no guarantee that it permanently goes away,” Bank of America’s Tanners said. “It probably doesn’t go down without a fight.”

Dumping Nonsense

The US Steel debacle shows just how ludicrous the "China is dumping steel" meme really is.

The irony is US Steel corp. cannot even compete with the tariffs that it wanted.

Meanwhile chalk up another tariff "win" for the president.

Mike "Mish" Shedlock

Comments (50)
No. 1-17
Ted R
Ted R

I have to admit his tariff's haven't helped American industry much. Or even at all.

Sechel
Sechel

Tariffs usually never do help. An exception might be for young industries that don't have economies of scale but even then its questionable. Thinking about Whirlpool that got similar relief. They just raised prices and gave their CEO a fat bonus. Company will not undertake any action to improve competitiveness. The tariffs are simply a tax , collected by the company in the form of higher prices.

Anyone who thought the tariffs would help was guided more by Trump's tweeting than by an understanding of basic economics. Anyone who has opened up a Mankiw economics text as an undergrad should have told you that.

That our President who has a Wharton degree advocated otherwise brings to question whether he attended school. We should all demand proof he attended K-5th grade even.

JonSellers
JonSellers

Blast furnaces: the grand symbol of the utter incompetence of American executive management.

Je'Ri
Je'Ri

The continuing sales pitch that the tariffs are not a tax on the American people is mind-boggling. I particularly love the tariffs "on Mexico" to force the border control issue; in a sane world, the Trump administration would be taxing remittances, many of which are being sent by illegals to families back home; that would make Mexico and other source-countries pay.

numike
numike

Americans Shocked to Find their Rights Literally Vanish at U.S. Airports The number of people detained, their phones and laptops searched without warrants, is exploding. Why? https://www.theamericanconservative.com/articles/americans-rights-are-literally-vanishing-at-the-airport/