After a year and a half of being in the doghouse, the American steel industry has finally bounced back. With stocks like Nucor and Steel Dynamics on fire, Jim Cramer decided to take a closer look to determine if the rebound in steel is real.

"One of the most amazing and rapid comebacks I have ever seen, and I have been around for a long time," the "Mad Money" host said.

The steel group reached a multi-year high in 2014, but then quickly fell off a cliff until the end of last year. The declines stemmed from many marginal buyers of steel — namely emerging market countries such as Brazil and China — suffering from an economic slowdown.

The slowdown in China in particular created a twofold problem for steelmakers in the U.S.: first, was the decrease in demand for steel, which caused the price of the commodity to plummet.

The second aspect, Cramer said, was that the Chinese government was propping up its steelmakers with cheap loans from state owned banks. Thus, Chinese companies continued to produce steel though there wasn't as much demand in China, and instead dumped it around the world at unprofitable prices. This caused the entire globe to be flooded with cheap steel.

These impacts were toxic to the earnings of steelmakers in the United States.

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A major game changer came forward about a month and a half ago when the Obama administration attempted to stop the flood of cheap Chinese steel. In early February, Congress passed the new customs and trade enforcement bill, which gave the president authority to take action against China's dumping of state-subsidized goods.

On March 1, the commerce department announced it would add import duties on cold-rolled steel from seven countries, including China.

"Call that protectionist if you want to, I say it is smart policy and one of the most pro-business things President Obama has done since taking office," Cramer said.

Another element that has helped steel to rally is that the demand picture for steel and other commodities appears to be improving.

So, Cramer was not surprised when the price of hot-rolled coil steel surged to nearly $480 on Tuesday, up from $360 near the end of the year.

"The Obama administration's new tariff on Chinese steel was an absolute game-changer that has effectively negated the No. 1 threat to the American steel industry. Throw in a new and improved economic landscape and I think these stocks have more room to run," Cramer said.

Cramer recommended sticking with high-quality stocks, such as Nucor. As for the others, Cramer said investors could have missed the run and to wait for the next downturn to own the group.

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