Trump inaction has steel industry facing new crisis

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.