Manufacture This

The blog of the Alliance for American Manufacturing

Steel tariffs gave the entire community a restart. It's just the first step.

President Trump is scheduled to be in Granite City, Ill., on Thursday afternoon, where he’ll visit the U.S. Steel facility that recently announced at least 800 new jobs and the restart of two blast furnaces.

Trump is going to meet with about 500 people and give a speech — and while it’s impossible to predict what the president is ever going to say, we’re guessing he’ll take some credit for the progress that has happened in Granite City over the past few months.

Trump’s decision to issue steel tariffs led U.S. Steel to boost production at the Granite City plant. But it’s also worth pointing out that steelworkers there have been fighting unfair trade for quite some time — and this isn’t a battle that ends with the implementation of the tariffs.

If Trump really wants to help places like Granite City, tariffs aren’t enough — he’s going to need to implement a long-term plan to finally resolve this longstanding crisis.

A Global Problem Hits Home

Like many manufacturing facilities around the country, Granite City has been hit hard for years now by surging imports from countries like China, which makes way more steel than it needs for its own use.

Because that steel is heavily subsidized by the government (and many steel plants are government-owned), China dumps it into the global market, priced far below market value. 

That’s unfair to companies and workers who operate in an open market and play by the rules — and it led to the steel imports crisis. In places like Granite City, that’s meant layoffs and plant closures.

The Alliance for American Manufacturing rallied with workers in Granite City back in 2014, when jobs nationwide were threatened because of surging imports of specific steel products called oil country tubular goods (OCTG). Granite City Mayor Ed Hagnauer explained that the steel mill not only meant a lot to the workers at the plant, but also to the entire community.

“It’s an abundance of jobs, it’s a great tax base for us, it’s a great tax base for the county, it’s a great tax base for our whole area,” Hagnauer said.

Eventually, tariffs were issued on OCTG goods, along with other steel products, mostly from China. But those specifically-targeted tariffs only put a band-aid on the problem; the global overcapacity crisis continued.

And Granite City felt the pain.

In late 2015, U.S. Steel announced it would idle the Granite City plant, leading to more than 2,000 layoffs.  

“There continues to be a glut of imported goods that challenge the overall industry,” U.S. Steel spokeswoman Courtney Boone said at the time. “A number of those goods, we believe, are unfairly traded, and shows an un-level playing field with subsidized steel coming in from other countries.”

A year later, the laid-off steelworkers continued to struggle, many unable to find work that matched the good-paying job they had at the mill. Casey Ballentine, who once had been earning up to $92,000-a-year at the mill, now found himself standing in line for a free turkey at Thanksgiving time.

“I’m struggling to find a job,” Ballentine said. “I have two little girls at home.”

United Steelworkers Local 50 President Jason Chism, who works at Granite City Works, said that “it's just been heartbreaking to see what is happening in Granite City.”

“We have food banks set up at the union halls. Members being retrained in other job fields. Members not being able to find family sustaining jobs," he said. "Most members are out of benefits.”

Meanwhile, folks like United Steelworkers Local 1899 President Dan Simmons came to Washington to urge action on steel imports.

He was one of several folks from steel towns across the country who made the trek, urging Trump to finally act on the "Section 232" national security investigation into imports. Given that steel is essential for both the military and critical infrastructure, military leaders and others argued it was essential that something be done to defend this key part of our industrial base — especially given that countries like China were disrupting the global market with heavily subsidized steel.   

“These guys are cheaters, they’re known cheaters, these countries, China and these other countries, are known cheaters. And we’ve proven it over and over again,” Simmons said. “It’s not difficult to prove, it’s just getting the cases heard.”

A Restart — and Another — Breathes New Life into Granite City

By the start of 2018, hope was running out for many of the Granite City steelworkers.

Scott Wolfe, a married 44-year-old father of two, had sent out 300 resumes after being laid-off. Still, he considered himself one of the lucky ones, as he managed to land a job with an ambulance service.

But that gig paid $11.75 an hour, a fraction of what he made at the mill. It didn’t provide health insurance, either — and his insurance ran out on March 1.

A week later, Wolfe received a call from U.S. Steel’s human resources department, asking if he wanted to return to the mill. President Trump’s tariff announcement spurred U.S. Steel to call back 500 workers and restart one of the two blast furnaces at Granite City.

“Our savings is gone. We’ve got the car payment, the mortgage payment, and those two years on layoff, I didn’t get to save toward my kids’ college education,” Wolfe said. “Now I am happy, my wife is happy… it’s a good time in the Wolfe house now. It’s a good time in the whole community.”

Simmons said Granite City was “exuberant” after the restart was announced.

“I had a guy come up here late last night. He snuck up the stairs and I said, ‘Who’s coming up here this late?’ And the next thing you know, he peeked his head in the office and said, ‘Tell me the rumor is true,’” Simmons recalled. “I told him that I heard that they were supposed to announce this, and he looked at me with a big grin on his face and came up and hugged me. This is a guy that doesn’t huge people. He said it’s the best news he’s heard in a long time. He’s been on his fourth job since he’s been idled. He was overwhelmed. He was elated.”

In June, U.S. Steel announced it would restart the second blast furnace, bringing back 300 more employees. Steelworker Tom Ryan, a Local 1899 official, told the St. Louis Post-Dispatch that every worker who had been waiting for a recall had a job — the company was now able to hire new workers, right off the street.

Meanwhile, the entire town had its spirits lifted. James Amos, the city’s development director, told St. Louis Public Radio that sales were up at local businesses because of the restart. One example: Laura Smith, a co-owner of Holt Shoe Shop, told the St. Louis Post-Dispatch that her sales were up 20 to 30 percent compared to last year.

“We’re enjoying it, and we just hope it stays steady,” she says.

The Fight Has Just Begun

Staying steady will continue to be a challenge for steel communities like Granite City. While the steel tariffs have certainly provided a fresh start, the overall global steel crisis remains unresolved, as China continues to make too much steel.

If a long-term global strategy is not put into place to finally solve the crisis once and for all, it’s possible that Granite City could once again find itself idle.

China is highly unlikely to stop making so much steel — it’s promised to do so several times before without any real results. That’s why the United States and its global allies must now work together to make it hard for China to actually sell its steel on the global marketplace.

Since being implemented, tensions over the steel tariffs between the U.S. and allies like Canada and the European Union have been high. But the good news is that both Canada and the E.U. have announced steps to curb steel dumping in their market, and Trump and European Commission President Jean-Claude Juncker announced some progress on Wednesday on trade.

Meanwhile, there’s a lot that can be done at home, too. For starters, a long-awaited (and much needed) infrastructure package would create millions of jobs and provide a big boost to the steel industry, especially if Buy America preferences are included. Smart workforce development programs also are critical, not only for steelworkers but factory employees across America.

Places like Granite City have shown they are up for the challenge. And while Trump no doubt will claim victory in Granite City, he’d be wise to remember that this is just the first step.