ASHLAND, Ky. — Brenda Deborde cried throughout her 16-hour shift at the steel plant here when she received official notice this August that her job was being cut.
Deborde had hoped President Donald Trump’s tariffs could revive this once-mighty mill on a bank of the Ohio River, which for much of the 20th century formed the center of economic life in this part of eastern Kentucky.
She and her husband, Matt, had traveled to welcome the president as he went to a rally in nearby Huntington, West Virginia, waving their Trump flag and “Make America Great Again” hat to the motorcade from the side of the road.
“We really thought the tariffs were going to turn us around — that things would go back to being the way it was. We thought it could be a kind of saving grace,” said Deborde, 58.
It wasn’t. By the end of this year, she and Matt will lose their jobs at the plant after almost two decades. They aren’t sure what they will do next.
Last year, Trump imposed tariffs on steel and aluminum imports to try to boost domestic production. It appeared to work, briefly, sending company stock prices higher and leading to more hiring and production.
But that boost appears short-lived. The industry faces strong head winds threatening to undermine one of Trump’s central economic promises ahead of his 2020 reelection campaign.
Steel prices — which soared as the tariffs were introduced — have since fallen below where they were at the outset of the trade war, dropping by more than 40% since last summer, according to one key metric.
The stocks of the biggest steel companies — which also rose dramatically when the tariffs first came on — have similarly tumbled over the past year, in some cases by more than 50%.
They have been hurt by tepid domestic demand for steel production amid a U.S. manufacturing recession and a global slowdown in economic growth, among other things.
The sudden unevenness in the sector may risk creating a political vulnerability for the president who pledged to bring manufacturing jobs back to Appalachia.
Trump has said that the substantial collateral damage from his trade war with China, particularly devastating to farmers in the Midwest, is justified in part by the need to revive American steel and bring back steelworkers’ jobs.
Trump has continued to boast about the steel industry’s recovery, taking credit for its revitalization even as warning signs have emerged.
“Steel was dead. Your business was dead. OK? I don’t want to be overly crude. Your business was dead. And I put a little thing called a ‘25% tariff’ on all of the dumped steel all over the country. And now your business is thriving,” Trump said at a rally in August in Monaca, Pennsylvania. “Our steel mills are fired up and blazing bright. The assembly lines are roaring. ... The steel companies are thriving again.”
In a statement, White House spokesman Judd Deere said more than 5,700 jobs in steel have been added since the tariffs were implemented, resulting in a 2.8% increase in steel employment, as well as rising wages for steelworkers. (The White House did not provide a source for this statistic.)
Steel employment has risen slightly since the tariffs, data show, but is falling this year and remains well below levels from 2012 to 2014.
“Without those tariffs ... the steel industry would be in fragile straits,” said Peter Navarro, a top White House trade adviser. “The biggest factor driving the slowdown in the U.S. economy, from what should be 3 percent growth to around 2 percent, is a highly misguided Federal Reserve policy that raised interest rates too far and too fast.”
Many companies like AK Steel, the Ashland plant’s parent company, face challenges despite the administration’s efforts to insulate domestic steel production from foreign competition.
Analysts say the weaknesses in the global economy, exacerbated by a recession in domestic manufacturing, risk wiping out the U.S. steel industry’s gains from Trump’s tariffs. The administration’s tariffs may have successfully helped curtail foreign competition, analysts say, but steel is being buffeted by softening demand due to these broader economic trends, including a strong U.S. dollar that hurts exports generally.
Demand for steel in the United States grew 2.1% in 2018. But this year a slowdown in American construction and automobile production helped diminish growth in demand to just 1%, and it is projected to grow just 0.4% in 2020, the World Steel Association said last month.
Many American steel companies now find themselves in a precarious position, analysts say.
After the tariffs were announced, the U.S. Steel Corporation’s stock price jumped from $33 to $45. The company announced it would restart an idled blast furnace in Granite City, Illinois, and Trump attended an event to celebrate the reopening.
But about 15 months after that heady moment, U.S. Steel is struggling. Its stock has since slid to just north of $10 per share. Since August, the company has announced it would temporarily lay off up to 200 workers at a plant in Michigan and hundreds more at a plant in Indiana, according to news reports.
Similar stories abound. In September, Bayou Steel in Louisiana abruptly announced it would be laying off close to 400 employees.
The slowdown’s impact has spread beyond steelworkers. Greg Miller opened Alma’s restaurant a few blocks from the AK Steelmill after Miller and his husband moved back to their hometown to serve “what Appalachians think Italian food is,” Miller said with a grin.
But one day last month, Miller was rummaging through the restaurant’s remaining cutlery, pans, plates, trays and other kitchenware. With cuts at the steel mill reducing his customer base, Miller shuttered Alma’s permanently a few days later.
“When you go from earning $100,000 a year, or $70,000 a year, to making $10 an hour — well, it’s obvious,” Miller said. “You can’t afford spaghetti and meat sauce for $19.”