In his latest bid to save the domestic steel industry from an economic free fall, President Trump signed an executive order today that mandates greater use of U.S.-made steel and iron in federal infrastructure projects. The Washington Post reports:
Peter Navarro, a White House trade adviser, told reporters the order would reinforce the administration’s “Buy American preferences” by requiring 95 percent of steel and iron used in federal contracts be American-made.
It follows a similar executive order Trump signed in January and arrives a little more than a year after the president initially imposed tariffs on imported steel and aluminum. Trump said the levies would boost national security, ensure well-paying jobs and help provide leverage in trade negotiations.
Even with federal support, the domestic steel industry continues to slip. The initial implementation of steel tariffs pumped up the market with some temporary prosperity, but now domestic steel production is down for its third consecutive week in a row and steelmakers are announcing price increases to close the gap.
The problem could be indicative of a greater economic downturn, the Washington Post reports.
“Things came back down to earth this year because the demand pulled back and industrial economy has softened,” said Phil Gibbs, a steel industry analyst at KeyBanc Capital Markets. “Now you’ve got a year where spending in the energy sector is down, auto is down, nonresidential construction is down and durable-goods orders are falling. You do have real demand weakness in the U.S. industrial economy.”
Prices of hot-rolled coil steel — an industry benchmark — have fallen from last year’s high, $900 a short ton, to a little below $540 a short ton, according to data from CME Group. As of Monday, the S&P Supercomposite Steel Index was down more than 12 percent year to date.
Still, President Trump has celebrated his actions to help the domestic steel market as one victory (of many) in his presidency. The real question is, will domestic steelmakers agree?