USA UNCHAINED: US Steel Unveils $750 MILLION Plant Project, Credits TRUMP TARIFFS
From the post:
"US Steel unveiled its new proposal to reinvest $750 million in its Gary, Indiana plant over the weekend; directly citing President Trump’s tough tariffs for what industry insiders are referring to as a “renaissance.”
According to the Chicago Tribune, the company plans to make “significant upgrades” to the facility to cope with increased demand for nationally-produced steel after the President imposed stiff taxes on international goods.
“The investment in the Gary plant is part of a $2 billion asset revitalization program at Pittsburgh-based U.S. Steel. The five-year Gary project will include building expansion and the installation of new production equipment and technology,” writes the Tribune."
And "they" said the U.S. steel industry was dead and buried. Looks alive to me.
"US Steel unveiled its new proposal to reinvest $750 million in its Gary, Indiana plant over the weekend; directly citing President Trump’s tough tariffs for what industry insiders are referring to as a “renaissance.”
According to the Chicago Tribune, the company plans to make “significant upgrades” to the facility to cope with increased demand for nationally-produced steel after the President imposed stiff taxes on international goods.
“The investment in the Gary plant is part of a $2 billion asset revitalization program at Pittsburgh-based U.S. Steel. The five-year Gary project will include building expansion and the installation of new production equipment and technology,” writes the Tribune."
And "they" said the U.S. steel industry was dead and buried. Looks alive to me.
We believe the answer has to be an effort in favor of defending America’s steel industry. Too much is at stake. America’s national security depends on a reliable supply of steel. America’s infrastructure, much of it urgently in need of renewal, depends on steel. Great American industries, including automobiles, aerospace, and many others, depend on a reliable supply of high-quality, low-cost steel. Thousands of jobs also depend on the steel industry.
Equally important, the international rule of law depends on the US taking a strong stand today. In the last nine years, China has increased its steel production 65% and now accounts for 50% of world production and 23% of world steel exports. Some believe it is the Chinese government’s deliberate intention to weaken the US steel industry; others say they are simply subsidizing their loss-making steel industry with billions of dollars of government money as a huge employment program, and taking advantage of the US market as the only major nation willing to accept large-scale imports.
National Security
The January report from the Commerce Department explains that the US military depends on steel for weapon systems, ships, planes, and land vehicles. Although critics have argued that only 3% of US steel production is required for defense needs, this ignores the broad range of types of steel needed by the military and the way a complex industry really works. As Commerce spells out in its report, the military needs not just thousands of tons of common steel plate, it also needs specialty steels including high-carbon forged steel, high-tensile strength steel, high-carbon steel laminate, steel forgings, and other steel alloys that deliver greater strength at lower weight than ordinary steel.
All these steel variations can only be produced by a healthy commercial industry deriving the majority of its revenue from civilian customers. The report cites (Appendix H, pg. 3) two cases where the Defense Department (i.e. the US taxpayer) has had to provide funds to the industry to ensure a supply of specific steel variations: one for the high-purity, low-alloy, iron-based steel used in MRAP vehicles widely deployed in war zones to protect troops from mines, and another steel variation for Navy-grade, heavy-alloy steel plate used in submarines, helicopter landing decks, and other military vehicles.
A robust steel industry is required to meet these needs. Yet despite the economic recovery since 2009, US steel production has declined, down 12% since 2012 to 78.5 million tons in 2016. The US has lost 11,000 steel jobs since 2012 to reach a new low of 81,400 employees, according to BLS data. Continued decline of the industry threatens our defense needs, including our ability to respond quickly in times of crisis. As the Commerce report (pg. 26) puts it: “A continued loss of viable commercial production capabilities and related skilled workforce will jeopardize the US steel industry’s ability to meet the full spectrum of defense requirements.”
A healthy industry is also important for the civilian economy. Steel is one of the most widely used materials in the world. Innovations in steel capability often play a substantial role in new opportunities and the competitiveness of industries like automobile and aerospace production. The view that steel is a mature, unchanging, dirty “old” industry is a facile presumption of those who don’t understand modern manufacturing. Research and development plays a role in every manufacturing industry. Steel and steel alloys evolve and change. As the World Steel Association points out, 75% of the steels in use today did not exist 20 years ago. Thanks to technological progress, the Golden Gate Bridge, which required 83,000 tons of steel when it was built in 1937, could today be built with only half that amount of steel. Our largest steel company, Nucor, has developed an innovative technique, known as Castrip, to use rollers to produce steel sheet as thin as 1 millimeter directly from the steelmaking furnace. The process is cheaper, more space-efficient, and more energy-efficient.
Or his term ends . . . ?
Difficult to make sound investment decisions when political imperatives drive the decisions more than sound economic evaluation.