Steel industry cuts earnings and profits right after Trump says it's 'thriving'

The steel industry is experiencing slowed growth and layoffs at the same time Trump has been touting the purported revitalization of the sector.

“The steel companies are thriving again,” Trump said in a speech in Pennsylvania last week.

But they aren’t.

“US Steel cut its earnings outlook earlier this year and has plans to reduce production at another plant in Indiana. Its shares are down 60% over the past year,” CNN reported on Friday. “Other big steel companies like Nucor and Steel Dynamics are forecasting lower profits, too.”

“Despite Trump’s best efforts, the next year isn’t looking too bright for the steel industry,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, told the outlet. He described the problems in the steel industry as a “harbinger” for the near future.

Trump campaigned in 2016 on the promise of revitalizing the steel industry as part of his rhetoric calling for a renaissance in American manufacturing.

But the reality is that under his presidency, over 716,000 plant workers have lost their jobs. Trump’s proclamations about new plants opening bringing renewed hiring have often quickly turned out to be simply made up or plans that were in the works before his presidency.

Trump’s most prominent economic policy, the decision to wage a trade war, has hurt steel.

“Steel manufacturers’ fortunes are tied to the health of a number of other industries. Steel companies can’t succeed if those industries are struggling—and many of them are,” Real Clear Energy noted.

Trump promised that the trade war would be “easy” to win, but instead, companies have seen the cost of business increase and that cost has been passed on to consumers. The steel industry is not separate from the rest of the economy and so, even if some of the trade policies favor them, they still suffer from trade war fallout.

Steel was the industry best positioned to benefit from Trump’s approach to economics. But they are now caught in the undertow of his trade war, just like everything else.

Published with permission of The American Independent Foundation.