Serving Northern St. Louis County, Minnesota

Trump inaction has steel industry facing new crisis

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Don’t look now, but Iron Range taconite producers could soon be in trouble again. Imports of inexpensive foreign steel are up 24 percent so far this year, the biggest spike in steel imports since 2014, which was the last time that imports sent domestic steel prices tumbling. That left several iron ore producers on the Range shut down for months, and some never did reopen despite a modest recovery since.

Yet here we go again, as the price of iron ore has been tumbling since the summer and rising steel imports are putting increasing pressure on domestic producers. As of late summer, foreign imports comprised 30 percent of domestic sales and U.S. steel factories were running at just 75 percent of capacity, a level that industry officials say isn’t sustainable.

This wasn’t supposed to be happening. A year ago, then-candidate Donald J. Trump was talking tough on foreign imports. Trade agreements would be sent to the shredder. Buy American policies would be implemented. Industrial America was going back to work, Trump promised. Industrial workers, including many on the Iron Range, were convinced, and they voted for the Republican Trump in unprecedented numbers.

For a time, it seemed like Trump would make good on his promises. In just his first week, Trump signed an executive order approving the Keystone XL pipeline and another soon followed that fast-tracked new rules to require that all that new pipeline would be built with American steel.

Turns out, it was all classic Trump, which is to say pure puffery for his reality show presidency.

One of the dirty little secrets of the first nine months of the Trump presidency is that most of his executive orders, which he signs with great fanfare, are merely for show. Most are just vague directives, issued for the television cameras, with little to no follow through.

Turns out, of course, that TransCanada, which had proposed construction of the Keystone XL pipeline, had already purchased much of the pipe for the project from foreign suppliers, so Trump’s promise that the pipeline would be built with American steel was as hollow as the rest of his campaign pledges. The Trump White House quietly exempted the project from any Buy American provisions a few months later, not surprisingly without the big announcement he had scheduled for the signing of his original executive order.

The exemption probably wasn’t necessary anyway. Trump’s Buy American proposal has gone nowhere, as the president has focused on what he sees as more important issues—like NFL players kneeling for the national anthem or waging Twitter wars with Republican critics or Gold Star families. What’s more, the Keystone XL pipeline, which was supposed to transport diluted bitumen from the Canadian tar sands to U.S. refineries is looking increasingly in doubt anyway, another victim of the sagging economics of the oil sector.

Meanwhile, deadlines that the Trump administration had set for key decisions on steel imports, one in June, another in July, came and went without any action or decisions. In late August, 25 top industry executives wrote Trump directly, urging him to take immediate steps to head off a growing crisis for the industry, which they blamed on government inaction. The Commerce Department was supposed to release the results of a Section 232 investigation into foreign steel dumping months ago, but the administration hasn’t mentioned it in months.

When asked about the lack of action in September, Trump’s Commerce Secretary Wilbur Ross said the issue is being put on the back burner, in favor of tax reform. After all, to the Trump folks, approving tax cuts for millionaires and billionaires is a lot more important than worrying about the fate of the steel industry. The truth is, the industry, without a doubt, enjoyed significantly higher status and more actual effort from the Obama administration, which took concrete steps to rein in steel dumping beginning in 2015. But then the Obama administration actually engaged in the hard work of governing.

So far, all Trump has brought to the job is lip service and photo-ops. He plays president occasionally for the cameras, then hits the links or hangs out in the White House residence watching television news and ranting on Twitter about “fake news” or hurling insults at foreign leaders. What an embarrassment.

The steel industry, and its tens of thousands of employees, has good cause to worry. Trump’s America First rhetoric is just that, and the even the tone has changed since the departure of chief strategist Steve Bannon, who, despite his many flaws, appears to be a genuine economic nationalist, and was the one member of the Trump team who might have been willing to act on behalf of domestic steel. With the rest of the Trump White House and Cabinet filled with Wall Street financiers or, as with Betsy DeVos and Rick Perry, the just plain incompetent, there’s little chance that Trump will ever focus on the needs of the steel industry.

What’s worse, his Buy American rhetoric has actually fueled the rise in foreign imports, as companies that anticipated tougher regulations are using the current inaction to stock up on supplies. As steel inventories have risen, it has put increased price pressure on domestic producers. If the Trump administration ultimately fails to deliver, as seems increasingly likely, the bottom could very well fall out for the U.S. steel industry. Trump keeps promising a lifeline, but like so many other Trump promises, this one may well be just for the cameras.

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Steve Jacobson

I believe you are correct on many fronts regarding Pres. Trump but I truly do feel that it would be worse if Hillary or Bernie were in charge. Look how mad the local democrats are thinking that Nolan has crossed them.

Wednesday, November 1
bonfire

Steel imports, opioid crisis, disaster relief, etc are obviously not big concerns for Trump or GOP. Trump's top and probably only priority is Trump and his "ratings". GOP and most of Trump cabinet's priority is tax cuts for the top wealthy and big corps.

Repealing ACA was first step in GOP plan to get big tax cuts for multi-millionaires and billionaires and pave the way, make it easier in step two, GOP tax plan, for even more tax cuts. They didn't get want they wanted in step one so now they have to go for the gusto in step two tax plan.

Now here is where we should hear screaming alarms about deficits. GOP tax plan estimated to increase deficit by an additional $1.6 Trillion to $2.5 Trillion over 10 years. Additional of top of current deficit. As Dick Cheney said," deficits don't matter", at least not when GOP and presidency is in Republican control.

To pay for the massive giveaway to the super wealthy and corps, GOP plans so far:

Eliminate the deductions for state and local taxes.

Eliminate the mortgage interest deduction.

Tax income contributed to 401K retirement accounts, cap tax-deferred contributions to $2,400.

Cut $1 Trillion for Medicaid. 2/3 senior in nursing homes get Medicaid.

Cut almost $5 Billion from Medicare.

Cut billions from SSI, 8.4 million low income seniors and disabled including children with severe physical and mental limitations.

Outrageously, Trump boasts it's a "middle class" tax cut plan and he won't benefit, even be hurt by tax plan. He, his family and majority of his cabinet members would definitely benefit, $3.5 Billion on estate tax alone. Opposite of draining the swamp, the tax plan has been called "The Goldman Plan", written by cabinet member Gary Cohn, former president of Goldman Sachs. 13 of Trump cabinet members came from Goldman Sachs. Annual tax savings for 1% alone will be greater than incomes earned by at least 70% Americans. Tax Policy Center estimates that corporations will get massive tax cuts on profits, $2 Trillion over 10 years. Corporate tax cuts don't inspire corps to invest in "creating jobs". They give it to their stockholders. 10% of Americans account for 80% of American owned stock. 1% wealthy own 40% of it. What people may not realize is that around 35% of US equities are now owned by foreign investors, three times the number during Reagan administration. The GOP tax plan or "Cut, Cut, Cut" plan as Trump wants to name it, would give foreign investors $700 Billion over ten years.

The Institute on Taxation and Economic Policy has categorized incomes levels of Americans into quintiles which shows how much in tax cuts (or not) for the different income levels and per state. Here's what it would look like in MN:

Middle income level/tax cut per year (20% of population): $45,000 to $60,000 , tax cut $410

Next level: $66,000 to $111,000 income, tax cut $530

Level $81,000 to $95,000 income, tax cut $180

Level $121,000 to $250,000. 48% of them would see a tax hike avg of $110

Level $250,000 to $616,000 income, tax cut $3,510

Minnesotans with incomes over $632,000 (1% of pop) would get 62.2% increase in tax cuts, average $65,780 in 2018

Minnesotas with incomes over $1 million (0.7% of pop) would get average tax cut of $78,600 in 2018

Thursday, November 2
Minnesota Miners

I guess I am a little confused. Bonfire seems to want to talk about taxes on an article about steel imports, but I digress. I would have to agree that President Trump has been slow on doing something about illegal steel imports up to this point and that needs to be addressed soon. Even with that domestic steel production is up over 2016. Which is a great thing considering 98% of the taconite used in domestic steel production comes from either the Iron Range or the UP of Michigan. Check the following link. http://www.duluthnewstribune.com/business/mining/4352694-us-global-steel-production-%E2%80%94-and-so-us-steel-corp. One more thing before I finish. China is currently slowing down its steel production due to its smog/pollution problem there. Hopefully between that and President Trump taking action our local mines will stay in full production for a long time.

Thursday, November 2
Lee Peterson

I believe it's easy to see that bonfire was presenting a summary of the whole Republican Trump economic package in order to show just how far down the food chain the Republicans' immediate concern is for protecting the domestic iron ore industry. Let's hope the tariffs that the Obama Administration put on to limit steel dumping aren't traded for a tax cut. I think everyone knows that Republican Congressional leaders Paul Ryan and Mitch McConnell aren't friends of the working class.

I'm curious. Is "Minnesota Miners" a group, or is it one person? Kind of sounds like a Republican mining company lobbyist to me.

Monday, November 6
Minnesota Miners

Response to Lee Peterson: Minnesota Miners is a grassroots volunteer pro mining group. We a neither Republican or Democrat. We definitely are not paid lobbyist for any mining company we are totally non profit.

Tuesday, November 7
Lee Peterson

OK Minnesota Miner s. Now I've got it. You're an unpaid mining company lobbyist s.

And obviously not a Democrat.

Wednesday, November 8
Steve Jacobson

Lee, why is it a concern to you or anyone who Minnesota Miners is. Are you concerned that they don't live up here in Ely? Are you concerned that he/she might be from the twin cities voicing his/her opinion regarding our precious environment in our back yards? Are you concerned that he/she might be from Duluth and not be part of the Duluth opposition? His/her voice, no matter where it comes from is not an issue. If it is then we might have to draw up some guidelines on who can or cannot voice an opinion on this subject. Do you really want to open that can of worms?

Thursday, November 9
Minnesota Miners

Lee,

You are correct on one point I am definitely not a democrat. Still not a lobbyist for any mining company paid or unpaid. I believe that mining can and will be done in NE Minnesota in an environmentally safe manner. I choose not to listen to the constant sky is falling rhetoric coming from the anti mining side. We are about bringing good paying jobs back so that people can afford to raise families here. Tourism is on the decline in this area and has been for almost a decade, though it seems that some people just refuse to see the numbers. Trying to bait me into an argument by disrespecting myself and the group I represent isn't going to work Reid Carron tried that and it didn't work either. Haven't heard much from him lately have you.

Thursday, November 9
Lee Peterson

Gosh, Steve, I think your past cumulative rhetoric slamming local and downstate "environmentalists" and folks who were not born on the Iron Range, shows that you yourself drew up what you call "some guidelines on who can or cannot voice an opinion on this subject." Pretty obvious. Just review the things you've written over the months...

Anyone who reads your comments is aware that you, long ago, as you say,-- "opened that can of worms." But, it is hopeful, at least as of your last post, that you have softened your rhetoric. Thanks.

Friday, November 10
Lee Peterson

If you look back, I didn't ask who "Minnesota Miners" is by name, just if it is a group or if it is one person. The answer that I got back from "Minnesota Miners", --"You are correct on one point I am definitely not a democrat." goes a long way in defining "M.M." It's reassuring to me because we already have more than enough imposters running around masquerading as democrats.

MM also says that "Tourism has been on the decline in this area for almost a decade, though it seems that some people just refuse to see the numbers." I'm not sure how that is counted. I do know that I see a lot of folks who were once "tourists" who have moved permanently to Lake Vermilion, for example, and they are keeping the lumber yards, contractors, etc. very busy. These folks are helping to keep the lights on at a lot of businesses around here. All of the lake areas are experiencing the same thing across the Arrowhead.

I'm not against properly regulated and honestly non polluting mining where the companies are held responsible. And I've lived here my whole life, so I have witnessed the severe decline in mining jobs due to automation, increased scale and the durability of the new equipment. Just go online and check out the new driverless production trucks that are sure to make their appearance here if mining is to stay competitive with the rest of the world. And then check out how many production truck drivers there currently are in the mines 24-7. There are some realities involved.

Sunday, November 12