Trump Promised to Protect Steel. Layoffs Are Coming Instead.

Ana Swanson
Steel production at US Steel in Gary, Indiana.
Justin Solomon | CNBC

CONSHOHOCKEN, Pa. — At this sprawling steel mill on the outskirts of Philadelphia, the workers have one number in mind. Not how many tons of steel roll off the line, or how many hours they work, but where they fall on the plant's seniority list.

In September, ArcelorMittal, which owns the mill, announced that it would lay off 150 of the plant's 207 workers next year. While the cuts will start with the most junior employees, they will go so deep that even workers with decades of experience will be cast out.

"I told my son, 'Christmas is going to be kind of scarce, because mommy's going to lose her job soon,'" said Kimberly Allen, a steelworker and single parent who has worked at the plant for more than 22 years. On the seniority list, she's 72nd.

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The layoffs have stunned these steelworkers who, just a year ago, greeted President Trump's election as a new dawn for their industry. Mr. Trump pledged to build roads and bridges, strengthen "Buy America" provisions, protect factories from unfair imports and revive industry, especially steel.

But after a year in office, Mr. Trump has not enacted these policies. And when it comes to steel, his failure to follow through on a promise has actually done more harm than good.

Foreign steel makers have rushed to get their product into the United States before tariffs start. According to the American Iron and Steel Institute, which tracks shipments, steel imports were 19.4 percent higher in the first 10 months of 2017 than in the same period last year.

That surge of imports has hurt American steel makers, which were already struggling against a glut of cheap Chinese steel. When ArcelorMittal announced the layoffs in Conshohocken, it blamed those imports, as well as low demand for steel for bridges and military equipment.

James Rockas, a spokesman for the Commerce Department, said the administration was "aware of the plight of American steel workers and will continue working to halt unfair trade practices that harm our economy and kill American jobs."

In 2008, before the financial crisis struck, the plant ran around the clock. Now, the mill coughs to life just five days a week, for eight hours at a time. The machines shovel 10-ton steel slabs into a furnace, where they are heated to 2,000 degrees, then funnel them through giant rollers and cooling jets of water, like a massive, fiery carwash.

The plant's specialty is ultrastrong, military-grade steel — something that Eric Smith, a former Army paratrooper who has worked at the plant for over 30 years, prides himself on. Mr. Smith ranks 16th on the plant's seniority list, and he expects to survive the coming round of layoffs.

He grew up just down the street. The weathered houses of his old neighborhood on that dim day were fringed with icicle lights, evergreen bows and flags paying homage to Santa and the Philadelphia Eagles.

As a boy, he would long to work at the factory as he passed it. These days, he said, he gets a sinking feeling as he goes through the turnstile and enters the plant.

"You just got to keep on pushing forward. It is sad that Christmas time is coming around," he said. "You don't want to splurge for your kids like you want to, because the plant may be closing."

While he didn't support Mr. Trump, Mr. Smith said he hoped that the president would follow through on his plans. "It's still kind of early," he said.

Reforming trade was one of the president's signature campaign promises, and in his first months in office, Mr. Trump issued dozens of executive actions. One pulled the United States out of the Trans-Pacific Partnership, a 12-country trade pact. Others ordered investigations into imports or renegotiations of trade pacts.

Uncertainty about how these measures will reshape trade rules is now weighing on many industries. Companies are waiting to invest, or finding additional suppliers outside the United States, executives in agriculture, automobiles, solar energy and information technology have said.

In April, the president ordered parallel investigations into imports of steel and aluminum under the little-used Section 232 of a 1962 trade law, which permits sweeping restrictions to protect national security.

Earlier this year, tariffs seemed imminent. Wilbur Ross, the commerce secretary, said in late May that he expected to conclude the steel investigation by the end of June.

And in early June, Mr. Trump told a crowd in Cincinnati, "Wait till you see what I'm going to do for steel and your steel companies," vowing that he would "stop the dumping" of products at superlow prices by other countries.

"We'll be seeing that very soon. The steel folks are going to be very happy," he said.

But the announcement never came.

That appears to be caused partly by internal divisions within the White House. Some officials, like Mr. Ross — a former steel executive who was on ArcelorMittal's board until he was confirmed in February — wanted to push ahead with tariffs. But others, including economic and national security advisers, worried about repercussions, trade advisers say.

The tariffs had plenty of opponents. Automakers, food processors and companies in other industries that use steel and aluminum in their products complained that tariffs would drive up costs and make them less competitive, ultimately sacrificing more American jobs than they would save. Steel exporters, like the European Union, threatened retaliation. Prominent economists highlighted the risk of a trade war.

"I think the White House is immobilized, because they have such a cacophony of voices," said Senator Sherrod Brown, a Democrat from Ohio who describes himself as an ally of the president on trade. "This administration doesn't seem to know what it thinks about trade."

The administration will face a series of deadlines on the steel measure next year. The Commerce Department must present the results of its investigation to the president by Jan. 15. The president will then have 90 days to decide what to do.

President Trump and his advisers say they have been focused on the tax legislation, which Congress passed this week. The White House has said that it plans to turn to trade measures, including the steel investigation, once the bill is signed into law.

Still, the delay has threatened to fracture the brittle alliance the president has forged with some labor unions, who liked Mr. Trump's populist approach to trade.

Senator Bob Casey Jr., a Democrat from Pennsylvania, said the administration's commitment to workers would probably be an issue in the 2018 midterm elections. "They've sat on this for far too long," he said.

The United Steelworkers, the union that includes the workers in Conshohocken, has historically aligned with Democrats. But many workers opposed trade agreements forged by Presidents Bill Clinton and Barack Obama and viewed Hillary Clinton's stance on trade as insincere.

In a shift in the politics of trade, the union has defended the Trump administration's trade agenda against the criticisms of traditionally Republican business groups, like the Chamber of Commerce.

But Scott Paul, the president of the Alliance for American Manufacturing, a trade group that represents steelworkers, said he had "a profound sense of frustration that the president has been using steelworkers as political props."

"The president's own words and lack of action have actually put the industry in a worse position than if he had done nothing at all," he said.

Kameen Thompson, the union president at the Conshohocken plant, said many workers had voted for Mr. Trump because of his support for steel. "You want to vote for what you believe is going to help you keep a job," Mr. Thompson said.

Ms. Allen, whose father worked at the Conshohocken plant before her, was not a Trump supporter. "He told them what they wanted to hear so they would vote for him, and now they're seeing what president he is," she said.

But other workers who supported the president are keeping the faith.

Chuck Hauer, who has worked at the plant for 22 years and ranks around 80 on the seniority list — meaning he is likely to be laid off — said he had voted Republican because he believed that Mr. Trump was "for the people." He said he still believed that the tariffs would happen, though perhaps not soon enough to save him.

"He's just delaying it," Mr. Hauer said of the president. "And I think the delay is hurting us more than he knows."