American steel companies are planning to reopen several mills this year, adding jobs across the country, thanks in part to President Donald Trump’s tariffs.
That includes Fairfield, Alabama, where US Steel said it will resume construction on a furnace that had been halted in 2015, when China started flooding the steel market.
“It’s great news for us here. People can take a breath for the first time in nearly five years,” said Kevin Key, president of the local United Steel Workers union.
But the project will add only about 150 jobs — not nearly enough to make up for the more than 1,000 lost when US Steel shut down some of its other local operations in 2015. Many storefronts in the area are still boarded up, and even Walmart left town, Key said.
The story is the same elsewhere in the United States. Trump’s year-old trade war has succeeded in revitalizing an industry that experienced years of decline as China ramped up production. But that hasn’t translated into a boon for workers.
The steel industry added 2,400 jobs last year, an increase of just over 1%. Employment in the industry is still down about 43% since 1990.
Trump’s tariffs made it 25% more expensive to buy foreign steel, aiming to redirect business toward American producers. Steel production in the United States grew about 5% last year and producers are restarting shuttered mills and expanding existing plants, and have announced plans to build new ones.
“Our steel industry is so vibrant now, again. They’re building plants all over the United States. It’s a beautiful thing,” Trump said Friday.
Job creation may pick up as producers start reopening mills and building new ones, but analysts say will take some time, given how tight the US labor market is.
“Right now, there is a skills deficit in the steel industry. The people laid off years ago may be doing other things,” said Philip Gibbs, a steel analyst at KeyBanc Capital Markets.
The jobs being created on the producer side are coming at the expense of industries that buy steel, like nail and farm equipment manufacturers. Tariffs have made foreign steel more expensive, and allowed US companies to raise prices.
Steel consumers will pay an extra $650,000 for each job added by steel producers, according to a recent report by researchers at the Peterson Institute for International Economics.
Dozens of industry groups have urged the administration to lift the tariffs, including the US Chamber of Commerce. Automakers, for example, have said the tariffs have driven up the cost of production in the United States by $400 per vehicle.
So far, a lot of manufacturers that use steel have been able to absorb the tariff cost or pass some of it along to consumers. But that could end.
“Companies have done their best to look for short-term solutions. But they can’t go on for years like this and stay competitive,” said Dennis Slater, president of the Association of Equipment Manufacturers.
“Over time, the tariffs will be a drag on manufacturing and on the economy,” he added.