In steel country, a thumbs up to Trump's tariffs

By AFP/Michael Mathes   March 9, 2018 | 05:57 pm PT
In steel country, a thumbs up to Trump's tariffs
A furnace heats steel at the TMK Ipsco Koppel plant in Koppel, Pennsylvania on March 9, 2018. Several US lawmakers, industry leaders and foreign governments have decried US President Donald Trump's announced tariffs on steel and aluminum imports. Photo by AFP/Michael Mathes
'Trump's announcement is not a protectionist measure but a nod to America's workers and a restoration of fairness that has been absent for decade.'

U.S. lawmakers, industry leaders and foreign governments have decried President Donald Trump's tariffs on steel and aluminum imports.

But the controversial measures have been met with a far different reaction in and around Steel City.

Workers and companies in the Pittsburgh area, the industrial engine of western Pennsylvania that used to produce much of the world's steel, said Friday they were solidly behind the move.

Trump's announcement is not a protectionist measure but a nod to America's workers and a restoration of fairness that has been absent for decades, they argue.

"The steelworkers have never asked for special treatment, all we asked is for a level playing field," Bobby "Mac" McAuliffe, who heads the United Steelworkers union District 10 in Pennsylvania, told AFP.

"And those countries that cheat should pay the price through the increase in tariffs."

The Pittsburgh-based union, which represents some 850,000 workers in North America, is a powerful voice in an industry that has been crippled by cheap imports.

Labor representatives of industry titans like U.S. Steel lined up behind Trump in the Oval Office Thursday as he announced the tariffs, which drew immediate condemnation from congressional leaders in his own party as well as trade organizations that expressed concern over how the move would impact other industries, and potentially millions of workers.

For steel, it marked yet another step in what one executive called "an enormous comeback" for the industry.

"The overall effect is positive," Piotr Galitzine, chief executive of TMK IPSCO, a global leader in producing oil and gas pipes, said in an interview.

'Lose a little, gain a lot'

For Russia-based parent company TMK, the tariffs hit in both directions.

"We stand to lose a little on the import side, but gain a lot more on the domestic side," he said.

TMK-IPSCO operates 10 US facilities with 2,000 U.S.-based employees, and "they're delighted" with the tariffs, Galitzine said.

"It's no secret a lot of blue collar voters voted for Trump on the strength of his promise to bring back jobs" after seeing manufacturing positions exported over the last 40 years, he added.

At the company's Koppel plant, tons of scrap metal is melted down in an electric arc furnace that reaches temperatures above 3,000 degrees Fahrenheit (1,650 Celsius). It is turned into seamless pipe in a facility in nearby Ambridge.

Talk in Koppel was less about the political or trade ramifications of the tariffs -- and the possible trade war that might erupt as a result -- than the optimism for the local plant and the industry in general.

"We anticipate a very, very strong year this year," general manager Reagan Kinser said.

Mike Sabat, president of local United Steelworkers union 9305 and a maintenance employee at Ambridge, said workers saw Trump's move as "favorable" to the U.S. industry.

"They feel it's going to create jobs," he said.

Not everyone agrees.

The president's move will spark "swift and highly targeted" retaliation from abroad, with countervailing tariffs on U.S. exports, said Christopher Plummer, president of Metal Strategies, a consulting firm that analyzes the industy.

Prices will also rise on some goods that use aluminum, like cars and canned beer. "The question is whether it causes much pain," Plummer said.

The steel industry overall has recovered to a healthy degree from the collapse of oil prices in 2014, Plummer noted.

But Pittsburgh, perfectly positioned near highly prized coal and metal sources and at the confluence of three rivers, has been shifting away from heavy industry for years, said Chris Briem, a regional economist at the University of Pittsburgh.

And metal works have moved on to more profitable locations and more flexible, economic and mobile technology.

In the 1950s, when Pittsburgh's steel industry was the most competitive and biggest in the world, the region hosted more than 100,000 jobs in iron and steel mills.

That number has shriveled to just 5,000 today, as dramatic improvements in productivity and shifts in technology have changed the industry forever, according to Briem.

"You're not going to rebuild heavy industry in western Pennsylvania, with the tariffs or without," he said.

"There's no steel mill here waiting to restart."

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