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Manufacture This

The blog of the Alliance for American Manufacturing

A primer on why steel is one of the big issues in the election.

Let’s check in on what’s happening in the 2016 presidential campaign.

What policy issues are Republican Donald Trump and Democrat Hillary Clinton talking about on the campaign trail?

Look, we’ll be blunt: There’s not a lot of substantive policy talk happening in the presidential election right now. But what little there has been over the past few days has focused on manufacturing issues, with both candidates heading to blue collar states to talk about things like trade and job creation.

Man, manufacturing again? Why is it such a big deal?

Because the loss of manufacturing jobs, particularly in swing states like Ohio and Pennsylvania, is a big deal. More than 5 million factory jobs have been lost since 2000, and many of the Americans who once filled those jobs are struggling. China's entry into the World Trade Organization (WTO) is a chief reason for this job loss, and it's had such an impact that researchers call it "The China Shock." Some displaced workers are still unemployed, while others have found new jobs — but they pay a lot less. It’s one of the things contributing to the growing wealth gap. Manufacturing communities are in a lot of pain, and people want solutions.

Both Trump and Clinton have recognized this and made manufacturing job growth a key part of their campaigns. Trump mostly focuses on trade; Clinton has unveiled a comprehensive plan.

I watched Sunday Night Football instead of the presidential debate. Did this come up then?

Yes. At the end of the debate, undecided voter-turned-national hero Ken Bone asked the candidates for their plans on addressing America’s energy needs. Trump seized the opportunity to talk about China’s dumping of steel into the U.S. market.

Hold up — China dumping steel? What’s that about?

Over the past decade, China significantly built up its steel sector. Now, China’s government-owned steel companies are making far more steel than the country needs, but China is not reducing its own production levels to meet market demand. Instead, China is sending its excess steel to the United States to be sold at rock-bottom prices. This is unfair to U.S. steelworkers and companies, who operate in an open market place but now are essentially being forced to compete against a communist government. Check out the video below; it explains what's going on.

What’s happening to U.S. steel companies and workers?

At least 15,000 steelworkers have lost their job since the start of 2015 directly due to China’s dumping of steel; United Steelworkers President Leo Gerard estimates that number to be closer to 19,000. Dozens of steel facilities have closed nationwide. This is a crisis, and America's steelworkers are paying the price.

What’s being done?

U.S. steel companies have filed a number of trade cases to stop the flow of illegally dumped steel, and after conducting investigations in these cases, the Commerce Department has placed tariffs on a number of steel products. Meanwhile, the G20 announced a new global forum to find solutions to the global steel overcapacity problem. But these solutions come after workers and companies have suffered. Meanwhile, there's evidence China is dodging these tariffs by sending its steel through Vietnam. We need timely and enforceable action now.

O.K., back to the campaign. Trump is talking about this — what about Clinton?

As part of her larger manufacturing plan, Clinton has focused on strengthening trade enforcement, including by proposing the creation of a chief trade prosecutor who would be tasked with ensuring countries follow trade laws.

But Clinton also has seized an opportunity to hit Trump on trade, specifically the fact that he used China-made steel in many of his construction projects. She criticized him for it on Sunday during the debate, and has brought it up repeatedly on the campaign trail.

Wait a minute — Trump doesn’t use American-made steel in his construction projects?

It doesn't appear so. A Newsweek investigation released last week found that Trump used China-made steel in at least two of his three last construction projects, Trump International Hotel Las Vegas and Trump International Hotel and Tower in Chicago.

Is that illegal?

No, but it’s not a good look for a guy who has made revitalizing American manufacturing a big part of his presidential campaign. As Newsweek noted, not only is he not supporting U.S. steelworkers and companies by purchasing foreign-made steel, but he’s also supporting Chinese companies and the Chinese government, which heavily subsidizes its steel industry.

So what’s next for manufacturing, steel and the election?

On Monday, Trump said at a rally that he considers himself “in a certain way to be a blue-collar worker,” so he’s clearly still running with the manufacturing message. Clinton campaigned in Michigan and Ohio on Monday, where she shared her plan to create advanced manufacturing jobs and continued to criticize Trump for buying China-made steel.

Meanwhile, China’s massive steel overproduction continues. The next president is going to have to deal with this problem.