TEHRAN, November 13 -Nucor Corp, America’s largest steelmaker, planned a new plant in Sedalia, Missouri, long before U.S. President Donald Trump imposed tariffs to protect the industry – and it does not need them to make money.
TEHRAN, Young Journalists Club (YJC) -Nucor Corp, America’s largest steelmaker, planned a new plant in Sedalia, Missouri, long before U.S. President Donald Trump imposed tariffs to protect the industry – and it does not need them to make money.
Although the firm helped lead the lobbying push for tariffs on imports, executives say they invested in Sedalia and two other sites to capitalize on an already profitable strategy that doesn’t depend on government help.
While Trump has played up the narrative of downtrodden steel workers losing jobs to unscrupulous foreign competitors, most of the benefit from his 25 percent tariffs are flowing to the already strong bottom lines of Nucor and other modernized and globally competitive U.S. steel firms, according to interviews with industry executives, experts and a Reuters review of company earnings.
Even if tariffs prompt such firms to expand, they are not likely to add large numbers of factory jobs because they have stayed competitive by slashing the amount of labor required to make steel.
(For a graphic on steel industry efficiency and job loss, see: tmsnrt.rs/2PLloLb )
The Commerce Department said in a statement to Reuters that tariffs will help the Sedalia plant and 12 other steel projects create about 3,405 jobs. That’s a 2.4 percent gain industrywide, according to the American Iron and Steel Institute.
About 1,400 of those jobs at six projects, including the three Nucor sites, were planned before tariffs or do not rely on them, according to some of the firms and a Reuters review of company documents. In addition, two other projects by Republic Steel, which would create 690 jobs by restarting previously idled operations, are not certain to go forward, the company said.
A Commerce Department spokesman did not comment on whether all the projects on the administration’s list depended on tariffs but pointed out that steel imports have declined recently and domestic production has increased. The department said broad tariffs on imports were needed because of rampant “chicanery” by foreign producers who evaded existing countervailing and anti-dumping duties, which are applied narrowly to specific products.
Nucor has led the sector’s transformation to labor-saving plants since the 1970s, replacing older blast furnaces with more efficient modern electric arc furnaces.
Trump’s tariffs may prove pivotal in extending the life of older, less efficient plants such as U.S. Steel’s Granite City plant near St. Louis, where the president held an event in July to tout tariffs. The company credits tariffs for its decision to add 800 jobs by restarting two blast furnaces it had idled in 2015. A total of 1,500 workers will now work in a factory where sparks fly and molten steel is still poured from giant ladles in a labor-intensive, multi-step process.
At Nucor’s plant in Sedalia, by contrast, 225 people will make steel with a high-tech furnace that shoots electricity through scrap metal to melt it into new products. That technology is now used to produce nearly 70 percent of U.S. steel - with a third less labor and energy, according to Charles Bradford, president of Bradford Research Inc.
Nucor CEO John Ferriola testified in Washington last year that tariffs would encourage steel-sector investment, but he emphasized in a statement to Reuters that the company’s own capital projects are “designed to be competitive even without tariffs.”
Source: Reuters
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