ASHLAND, Ky. — Brenda Deborde cried throughout her 16-hour shift at the steel plant here when she received official notice in August that her job was being cut.
Deborde had hoped that President Donald Trump’s tariffs could revive this once-mighty mill on the Ohio River, which for much of the 20th century formed the center of economic life in this part of eastern Kentucky.
She and her husband, Matt, had traveled to welcome the president as he went to a rally in nearby Huntington, W.Va., waving their Trump flag and “Make America Great Again” hat to the motorcade from the side of the road.
“We really thought the tariffs were going to turn us around,” said Deborde, 58.
They didn’t. By the end of this year, she and Matt will lose their jobs at the plant after almost two decades. They aren’t sure what they will do next.
Last year, Trump imposed tariffs on steel and aluminum imports to try to boost domestic production. It appeared to work, briefly, sending company stock prices higher and leading to more hiring and production.
But that boost appears short-lived. The industry faces strong headwinds threatening to undermine one of the president’s central economic promises ahead of his 2020 reelection campaign.
Steel prices — which soared as the tariffs were introduced — have since fallen below where they were at the outset of the trade war, dropping by more than 40% since last summer, according to one key metric.
The stocks of the biggest steel companies, which also rose dramatically when the tariffs first came on, have similarly tumbled over the past year, in some cases by more than 50%.
They have been hurt by tepid domestic demand for steel production amid a U.S. manufacturing recession and a global slowdown in economic growth, among other things.
Trump has said that the substantial collateral damage from his trade war with China, particularly devastating to farmers in the Midwest, is justified in part by the need to revive American steel and bring back steelworkers' jobs.
The president has continued to boast about the steel industry's recovery on the campaign stump, taking credit for its revitalization even as warning signs have emerged.
“I don’t want to be overly crude. Your business was dead. And I put a little thing called a ’25% tariff’ on all of the dumped steel all over the country. And now your business is thriving,” Trump said at a rally in August in Monaca, Pa. “Our steel mills are fired up and blazing bright. The assembly lines are roaring.”
In a statement, White House spokesperson Judd Deere said that more than 5,700 jobs in steel have been added since the tariffs were implemented, resulting in a 2.8% increase in steel employment, as well as rising wages for steelworkers. The White House did not provide a source for this statistic.
Steel employment has risen slightly since the tariffs, federal data show, but is falling this year and remains well below levels from 2012 to 2014.
“Without those tariffs … the steel industry would be in fragile straits,” said Peter Navarro, a top White House trade adviser. “The biggest factor driving the slowdown in the U.S. economy, from what should be 3% growth to around 2%, is a highly misguided Federal Reserve policy that raised interest rates too far and too fast.”
Many companies like AK Steel, the Ashland plant's parent company, face severe challenges despite the administration's extensive efforts to insulate domestic steel production from foreign competition.
The administration’s tariffs may have successfully helped curtail foreign competition, analysts say, but steel is being buffeted by softening demand due to broader economic trends, including a strong U.S. dollar that hurts exports generally.
Demand for steel in the U.S. grew 2.1% in 2018. But this year, a slowdown in American construction and automobile production helped diminish demand to just 1%, and it is projected to grow just 0.4 % in 2020, the World Steel Association said this month.
“What you’re getting is a softening of domestic demand for steel,” said Gary Hufbauer, an economist at the Peterson Institute for International Economics. “The tariffs are not enough to overcome these headwinds.”
As prices have fallen by almost 50% since July 2018, purchasers of steel see little incentive to place new orders that may prove less expensive the following week.
The upshot is many American steel companies now are in a precarious position, analysts say, soon after they appeared poised for a major rebound.
After the tariffs were announced, the United States Steel Corp.’s stock price jumped from $33 to $45. The company announced it would restart an idled blast furnace in Granite City, Ill., and Trump attended an event to celebrate the reopening.
But about 15 months after that heady moment, U.S. Steel is struggling. Its stock has since slid to just north of $10 per share. Since August, the company has announced it would temporarily lay off up to 200 workers at a plant in Michigan and hundreds more at a plant in Indiana.