Demand for steel ‘stolen by illegally traded imports,’ but tariffs should reverse this trend: Nucor CEO

Key Points
  • Demand for steel is strong, says Nucor CEO John Ferriola, but the problem is that demand has been "stolen by illegally traded imports."
  • "Once we see that reversed, demand will return, and we definitely will bring our people back and increase our utilization and our employment," says Ferriola, who supports Trump's new steel and aluminum tariffs.
  • But others fear the tariffs could lead to job loss.

The demand for steel and steel products is strong, said Nucor CEO John Ferriola, and President Donald Trump's new tariffs will bring workers back into U.S. factories.

"The problem is that the demand has been stolen by the illegally traded imports, taking up that new demand," Nucor said Thursday on CNBC's "Closing Bell."

"Once we see that reversed, demand will return, and we definitely will bring our people back and increase our utilization and our employment," he said.

Earlier on Thursday, Trump signed into law new steel and aluminum tariffs.

The controversial tariffs, which are set to begin in 15 days, slap a 25 percent levy on imported steel and 10 percent on imported aluminum, exempting Mexico and Canada. The president has said the tariffs are an attempt to correct trade imbalances and create fair trading practices.

Ferriola, whose company is the largest producer of steel and steel-related products in the country, said he fully supports the tariffs.

"We're pleased with [Trump's] statements of tying the tariffs to a fair resolution to our trade negotiations," said Ferriola. "That's all we've ever really asked for. We want a fair deal, on a reciprocal, level playing field."

But stocks of the company have been down about 0.4 percent in the last week as investors fear the worst, including trade wars and job losses.

Between 2007 and 2017 the number of manufacturing jobs decreased from 13.5 million to 12.5 million. How many are due to trade and how many because of automation is unclear.

A study published on Monday by The Trade Partnership, an independent economic consulting group, found that about 33,500 steel jobs would be gained from the tariffs. But it found that 179,000 jobs would be lost, many in the service industry.

On Wednesday, Austan Goolsbee, former President Barack Obama's economic advisor, said tariffs actually eliminate jobs, rather than create more. Goolsbee pointed out that higher prices on steel and aluminum could lead some companies to cost-cutting measures, including laying off workers and increasing automation.

Ferriola said new jobs for American steel and aluminum workers will be the greatest impact from the tariffs, resulting in an even stronger economy.

"By getting a fair trade deal, we'll be able to bring that increased demand back into our facilities ... and that means more people working in those factories, longer hours," he said.