• Advertise
  • Contact Us
  • Supplier Directory
  • SCB YouTube
  • About Us
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Parcel & Express
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Robotics
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Customer Relationship Management
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • Green Energy
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • Sourcing/Procurement/SRM
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Management & Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Warehouse Automation
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • WHITEPAPERS
  • VIDEOS
Home » The Trump Tariff Twist That's Cost U.S. Steel $5.5 Billion

The Trump Tariff Twist That's Cost U.S. Steel $5.5 Billion

The Trump Tariff Twist That's Cost U.S. Steel $5.5 Billion
July 8, 2019
Bloomberg

President Donald Trump’s tariffs on foreign steel have sped the decline of some of the U.S. mills he vowed to help.

Exuberance over the levies dramatically boosted U.S. output just as the global economy was cooling, undercutting demand. That dropped prices, creating a stark divide between companies like Nucor Corp., that use cheaper-to-run electric-arc furnaces to recycle scrap into steel products, and those including U.S. Steel Corp., with more costly legacy blast furnaces.

Since Trump announced the tariffs 16 months ago, U.S. Steel has lost almost 70 percent of its market value, or $5.5bn, and idled two American furnaces in mid-June that couldn’t be run profitably at the lowest prices since 2016. Meanwhile, Nucor, down around 20 percent, has touted $2.5bn in expansion projects.

The president’s actions likely “sped up” up an unavoidable “evolution,” said Nucor Chief Executive Officer John Ferriola in an interview last month. “Are some companies are going to suffer? Absolutely. We’ll we see some capacity go away, I’m sure of it."

Last July, Trump stood on a makeshift stage at a U.S. Steel mill in Granite City, Illinois, and beamed as workers cheered the tariffs. At that point, the company had already restarted one of two blast furnaces at Granite City, and vowed the second would soon be brought online.

“Workers are back on the job, and we’re once again pouring new American steel into the spine of our country,” Trump said during the hour-long program. “U.S. Steel is back.”

Since then, though, there’s been a somewhat different outcome.

With the stronger steelmakers aggressively boosting capacity to grab market share, a dip in demand has left older, more costly blast furnaces at U.S. Steel and AK Steel Holding Corp. struggling to compete, even with foreign steel nudged out of the equation.

“Be careful what you wish for,” said Timna Tanners, an analyst at Bank of America who has dubbed the industry’s push to add capacity without enough demand “Steelmageddon.” She called it “ironic” that the tariffs are “punishing some steel companies.”

A spokeswoman at U.S. Steel declined to comment while AK Steel said its products have little overlap with EAFs, and that the additional capacity will further pressure imports.

As expected, the tariffs reduced steel imports, creating more demand in 2018 and boosting profits. With that cash in hand, added money from Trump’s corporate tax cut and confidence that protectionism is here to stay, domestic producers began adding more capacity than they would have otherwise.

The problem: This year, with the global economy cooling, demand — and prices — have fallen. That’s given an added incentive to EAF companies with superior profit margins and balance sheets to aggressively grab a bigger share of the market.

“Not all plants are the same,” said Mark Millett, CEO of Steel Dynamics Inc., who in November announced a new $1.8bn EAF mill to be built in the U.S. southwest. “Not all projects are the same.”

Suppliers to blast furnaces are sounding the alarm. In laying out his vision for iron-ore miner Cleveland-Cliffs Inc. at a recent conference, CEO Lourenco Goncalves painted a bleak future for what makes up the overwhelming majority of his current customers.

That’s why Cliffs is investing $830m in a Toledo, Ohio-based plant that will produce hot briquetted iron for electronic-arc furnaces run by firms such as Nucor, Goncalves said. They invested in the plant because “we were able to see the future of steelmaking in the United States,” Goncalves said in New York last month.

Many “blast furnaces will shut down.,” he added.

U.S. Steel is trying to show investors it can move past its legacy blast furnaces. In February, it announced the restart of construction on an EAF facility in Alabama. And in May, the company said it would spend $1bn upgrading facilities in Pennsylvania to produce more high-strength steel for the automotive industry.

“Less efficient capacity should go away, but there is no guarantee that it permanently goes away,” Bank of America’s Tanners said. “It probably doesn’t go down without a fight.”

    RELATED CONTENT

    RELATED VIDEOS

    Logistics Global Logistics Global Trade & Economics Industrial Manufacturing
    KEYWORDS Global Trade & Economics Industrial Manufacturing
    • Related Articles

      Trump’s Tariff Threat Sparks Global Race to Get Copper to the U.S.

      China Used the Rest of the World to Cushion Itself From Trump’s Tariff Barrage

    • Related Directories

      ProcureAbility

      GLS US

    Bloomberg

    U.S. Decides Against Renewing USMCA, Shifting to Rolling Talks

    More from this author

    Subscribe to our Daily Newsletter!

    Timely, incisive articles delivered directly to your inbox.

    Featured Product

    Popular Stories

    • 005_veteran_winemaker_gallo_embarks_on_an_ai_journey_v2-(540p).jpg

      Watch: Veteran Winemaker Gallo Embarks on an AI Journey

      Artificial Intelligence
    • SCB_Q326_Made4Net_Top5_THUMB.jpg

      Five Costly WMS Selection Mistakes Warehouse Leaders Keep Making

      Logistics
    • 003_the_future_of_ai_in_transportation,_warehousing_and_logistics_v1-(540p).png

      Watch: The Future of AI in Transportation, Warehousing and Logistics

      Artificial Intelligence
    • Flags for China and the European Union juxtaposed against each other

      EU and China Agree to Three Months of Trade Talks

      Global Supply Chain Management
    • two businessmen watering what look like healthy seedlings, but which grow from bombs underground

      Report: Majority of Tier-1 Suppliers Fail to Manage Supply Chain Sustainability Risks

      Global Supply Chain Management

    Digital Edition

    2026 esg cover main scb q2 2026 cover

    SupplyChainBrain 2026 ESG Guide: ESG — The Supply Chain’s Biggest Secret

    VIEW THE LATEST ISSUE

    Case Studies

    • Recycled Tagging Fasteners: Small Changes Make a Big Impact

    • A GRAPHIC SHOWING MULTIPLE FORMS OF SHIPPING, WITH A HUMAN STANDING AT THE CENTER, TOUCHING A SYMBOLIC MAP OF THE WORLD

      Enhancing High-Value Electronics Shipment Security with Tive's Real-Time Tracking

    • A GRAPHIC OF INTERLACING HONEYCOMBED ELEMENTS REPRESENTING GLOBAL BUSINESS TRANSACTIONS

      Moving Robots Site-to-Site

    • JLL Finds Perfect Warehouse Location, Leading to $15M Grant for Startup

    • Robots Speed Fulfillment to Help Apparel Company Scale for Growth

    Visit Our Sponsors

    4flow Arkieva Blue Yonder
    Carton Cloud CoEnterprise Dassault
    Duravant E2Open EPG
    General Logistics Systems GEP Hy-Tek
    iGPS Korber Lyngsoe
    Procurability Quinyx SAP
    Sikick Staples Systech
    S&P Global Mobility TADA Tive
    TransImpact US Bank Werner Enterprises
    WSI
    • More From SCB
      • Featured Content
      • Video Library
      • Think Tank Blog
      • SupplyChainBrain Podcast
      • Whitepapers
      • On-Demand Webinars
      • Upcoming Webinars
    • Digital Offerings
      • Digital Issue
      • Subscribe
      • Manage Email Preferences
      • Newsletters
    • Resources
      • Events Calendar
      • 2026 Event Coverage
      • SCB's Great Supply Chain Partners
      • Supplier Directory
      • Case Study Showcase
      • Supply Chain Innovation Awards
      • 100 Great Partners Form
    • SCB Corporate
      • Advertise on SCB.COM
      • About Us
      • Privacy Policy
      • Contact Us
      • Data Sharing Opt-Out

    All content copyright ©2026 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

    Design, CMS, Hosting & Web Development :: ePublishing