Want to See the Section 232 Tariffs in Action? Look Here.

Jeffrey Bonior

Jeffrey Bonior Writer/Researcher, AAM

When President Donald Trump implemented the Section 232 tariffs to protect an American steel industry weakened by the global overcapacity crisis, there were doubts about what effect the tariffs would have on stopping the flood of foreign steel into the United States.

It is nearly a year later, and positive results are slowly trickling in. That’s good news for an industry so important to our defense industrial base.

It is estimated that approximately 11,000 steelworker jobs have been returned to America’s economy. Idled mills have restarted production and new mills are being built.

Unexpectedly, two Oil Country Tubular Goods (OCTG) mills in recent weeks have benefitted as U.S. Steel, which was struggling with its tubular production, announced increased production and the hiring of additional workers.

At the OCTG pipe mill in Fairfield, Alabama things looked so bleak it appeared the entire mill would shut down. The rolled steel portion of the mill had been idle with the plant relying on its tubular production.

“The tube mill is operating; we slowed down but never shut down,” said United Steelworker Local 1015 President Kevin Key, “The steel-making facilities and the blast caster were shut down.”

There are currently about 600 workers in the pipe mill, and U.S. Steel plans another 150 workers in the coming months.

Key feels President Trump’s tariffs have had a positive effect.

“I think they helped,” said Key. “The numbers, especially in the last quarter of the year, which is usually a bad time for a lot of people, November and December are usually our slow months. But this year October, November and December we were up.

“We are usually in the 40-ton range but this year I think we ran 64,000 tons in December,” said Key.

The mill in Fairfield also has an advantage in its future steelmaking. An Arc Furnace that has been sitting in pieces on the ground for the past four years is going to be assembled and start cranking out quality, cost-effective steel.

“The Arc Furnace is cleaner, and it takes all the extra raw material costs out of the process of making steel,” said Key. “Right now, we have to buy our blues from a competitor and we are not making much money. Obviously, they are not going to sell them cheap because they are a competitor. But once we get the Arc Furnace built it will go from making steel 30 days out to two or three days out, so you don’t have to extend all that money. You save a lot of time and money. And not only can we supply for Fairfield, but we’ll help Lorain and other mills.”

The U.S. Steel facility in Lone Star, Texas could be one of those benefactors.

“Since 2016 we’ve been running the mill with basically half of the staff we had since the layoff in March of 2015,” said Trey Green, vice president of local 4134 in Lone Star Texas. “The company is quoting they need another 140 people to restart the number-one mill.” The company plans on having the number one up and running by May 1.

Green hired in at Lone Star 14 years ago, and at that time there were approximately 1,500 employees. Today the workforce comprises 400 steelworkers.

“We are still making inner and outer casting for OCTG, and that’s one of the things our number one mill is coming back on for, outer casting.

“I can say the tariffs have helped a little, but more so is the drilling they’re doing,” said Green. “I hate to quote somebody else, but I believe I read a piece that indicated only 17 percent of the tariffs have even affected tubular. Drilling has picked up with the Permian Basin and the Texas and New Mexico drilling that has helped us the most.”

The steel industry is making another roaring comeback in the United States, and the 232 tariffs are doing their part. If you’re interested in helping them stay in place, click here to send a message to Washington, DC: Don’t back a bill that would weaken the trade enforcement tools at the president’s disposal.

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Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

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