The steel production sector directly employs 86,000 U.S. people nowadays. Though employment levels have more lately stabilized, it is a fraction of the half-million-strong workforce the industry employed in the decade following World War II.
Although trade globalization shares a lot of blame for the decades-long decline in steel, analysts believe technological developments have also been rather important. So-called electric arc furnace technology, a more efficient method of manufacturing than the traditional open blast furnace operations that dominated for most of the 20th century, drives steel production steadily.
With just a fraction of the personnel, the same levels of output from the heyday of steel can today be attained. Producing a ton of steel required roughly ten man-hours as recently as in the early 1980s. Given several steel mills operating in concert now, the rate is as low as one man-hour.
“The way we make steel in the U.S. has changed a lot,” said Ken Kolb of Furman University in South Carolina, a specialist in the local impact of industrial transitions.
“If a fraction of that workforce is needed to essentially reach the same production levels, then there is simply no way to bring that degree of employment back,” Kolb said.
Assuming capacity levels rise, he said maybe 15,000 additional direct employment may be generated. However, the larger cost to sectors relying on steel inputs—such as autos, construction, solar panels, and solar panels depending on tariffed aluminum components—would most likely offset those benefits.
“Theoretically you’re going to be able to hire some people, but in reality the tariffs simply raise the average price of steel,” Kolb said. “And businesses simply buy less and sideline investment when the price of a good like that rises.”
While Trump’s 2018 steel tariffs generated 1,000 new direct employment, a research revealed that they cost downstream businesses dependent on steel to build their products as many as 75,000 jobs since they became less competitive due to increased prices.
Although some limited capacity could return online in the near future, said Josh Spoores, head of Steel Americas Analysis at the CRU Group consulting, the on-again, off-again character of the tariffs limits any instantaneous job benefits.
Although establishing new steel mills can take at least two years, Spoores said in an email if the higher tariffs stay there could be new investments.
Furthermore unclear is whether American workers themselves support the tariffs absolutely. After its Canadian branch denounced Trump’s declaration, the United Steelworkers union sent a statement with only modest support for the measure.
“While tariffs used strategically serve as a valuable tool in balancing the scales, it’s essential that we also pursue wider reforms of our global trading system, working in collaboration with trusted allies like Canada to contain the bad actors and excess capacity that continue to undermine our industries,” the union said.
Regarding Trump’s proposed “partnership” between U.S. Steel and Japan’s Nippon Steel, whose acquisition of the American company he earlier opposed, the union has also showed indications of a division. These days, Trump sees the agreement “creating” perhaps 70,000 jobs.
“There’s a lot of money coming your way,” Trump advised attendees of the Pennsylvania event.
In a statement Friday, the United Steelworkers indicated residual uncertainty about the Nippon deal.
“We have not participated in the discussions involving U.S. Steel, Nippon Steel, and the Trump administration, nor were we consulted, so we cannot speculate about the meaning of the ‘planned partnership’ between USS and Nippon,” the union added, referring first to the American company using an initialism.
“Whatever the deal structure, our main focus remains with the impact that this merger of U.S. Steel into a foreign competitor will have on national security, our members and the communities where we live and work,” it said.
