The hits just keep on comin’ for Donald Trump and the suddenly-beleaguered MAGA economy.
Just days after the rather disappointing news that US Steel plans to lay off hundreds of workers in Michigan, the company said it will idle a tin mill within three months, imperiling dozens of additional jobs.
The decision is related to an effort to consolidate operations in the US and it could translate into as many as 150 layoffs.
Shares plunged more than 5% on Friday amid a broader market swoon occasioned by Trump’s trade and Fed balderdash. It was the fourth consecutive day of losses. The shares are down 26% this month and a truly “impressive” 77% since Trump announced the imposition of 25% duties on foreign steel.
Apparently, the latest action is tied to “high levels of low-priced imported tin”, although details are somewhat sparse.
The affected mill employs nearly 300 people, around half of whom are expected to get positions at two of the company’s other facilities. Hopefully they won’t eventually close too.
“We will work with the union and we’ll work with existing vacancies in other plants to place as many people as we can”, a company spokeswoman promised, adding that “the exact numbers haven’t been finalized”.
Apparently, demand has been hit by the cheaper imports which have grabbed around half of the market in the US. “It’s definitely a trade issue”, the company said.
The Chicago Tribune captures the heart of the problem pretty succinctly. “In August 2018, US Steel announced it was investing $750 million to revitalize its flagship Gary plant to gear up for increased demand in the wake of President Trump’s tariffs on imported steel”, the paper recalls.
But, as we mentioned earlier this week, steel prices have plunged, in part because the trade war has weighed on the outlook for growth. “The domestic steel industry emerged as an early winner, but steel prices have since fallen sharply in the wake of a cooling global economy and decreased demand”, the Tribune goes on to say.
Since the onset of the trade war, analysts and economists have variously warned that Trump was grossly underestimating how daunting a task rewriting the rules of global trade and commerce was likely to be. That skepticism, along with the common sense assessment that says revitalizing struggling domestic industries can’t possibly be as simple as slapping on tariffs and patting oneself on the back as the renaissance unfolds, informed the opinions of those who suggested the administration’s policies would be a dead end.
The bottom line is that, stripped of the nuance, US Steel’s predicament would appear to be another example of promises made, but certainly not kept. America’s farmers know a lot about that too.