Trump: tariffs will rescue US steel industry - WSJ

According to a report by the Wall Street Journal, US President Donald Trump believes that his steel and aluminum tariffs are single-handedly revitalizing a dying industry, and predicts that future competition for US steel companies will be almost entirely domestic.

Key quotes

"In an impromptu, 20-minute Oval Office interview Wednesday, Mr. Trump said some people may complain that in the short term steel prices may be “a little more expensive,” but that they ultimately will drop and his moves will have preserved an industry important to national security.

Competition will be “internal, like it used to be in the old days when we actually had steel, and U.S. Steel was our greatest company,” he said. In what he called a sign that the tariffs are working, Mr. Trump said steel companies are opening new U.S. plants and “our steel industry is one of the talks of the world. It’s booming.”

Many economists, business leaders, and members of Mr. Trump’s own party would take issue with his boasts, arguing that he is both exaggerating the benefits of the policies while understating their significant direct and indirect costs. While some steelmakers have expanded U.S. production in the wake of the tariffs, other U.S. manufacturers remain heavily dependent on imported metals. Moreover, even the administration’s own estimates of the tariffs’ impact project a reduction in imports, not their elimination, still leaving significant foreign competition for U.S. makers.

Foreign steel companies make large numbers of specialty products that American ones don’t produce, and, experts say, are unlikely to jump into those segments, even with new protections. Steel users around the country have blamed the tariffs for higher costs, crimped profits and, in some cases, layoffs and production cuts. A Missouri nail company received widespread attention for claiming that higher input costs from the tariffs led to a 70% drop in orders and a 25% cut in its workforce.

Critics also point to the bigger losses that have resulted from retaliatory tariffs by trading partners. Harley-Davidson Inc. has drawn Mr. Trump’s ire by complaining publicly about the double-whammy it has suffered. European tariffs on certain American exports have prompted the motorcycle maker to shift production outside the U.S., while it said higher steel and aluminum costs would boost its cost of U.S. assembly by $55 million this year."