The back story of America’s loss of dominance in steel production
The back story of America’s loss of dominance in steel production
U.S. steel producers certainly have something to celebrate with the new 25% tariffs on imported steel. But even if it helps the industry, the U.S. has nothing like the control of the global market it once had. And steel is far from the great American employer it once was. Not much can change that.
Before the 1970s, “we made more steel than anybody else in the world,” said Raymond Monroe with the Steel Founders’ Society of America.
Then other countries started to lead the pack, like Russia, Japan and, nowadays, China. “This year we’ll make 90 million tons. They’ll make 1 billion tons. Make more steel than the rest of the world combined,” Monroe said.
China really needs steel, said Amy David, a professor of management at Purdue University. “China has been using a lot of that steel as China rapidly, rapidly industrialized,” she said.
But Philip Bell, president of the Steel Manufacturers Association, said the problem is that China makes too much steel for its domestic market to absorb. So it exports it, for low prices, to an oversupplied market.
The U.S. does depend on some foreign steel. “The import market share was about 25%,” said Douglas Irwin, a professor of economics at Dartmouth College. He said most of it comes from political allies like Canada, Germany, Japan and South Korea, “who were not going to cut us off from steel if there was a national emergency.”
The U.S. was still the fourth-biggest producer globally in 2023, according to the World Steel Association. It’s just that our production hasn’t grown much. And U.S. steel employment has shrunk significantly. Tom Prusa, an economist at Rutgers University, attributes that to technology.
“Yes, there’s a lot fewer workers. Is that because of imports, or is that because they’ve gotten way better at producing steel? I think it’s the latter,” he said.
Prusa said American steel just takes many fewer people to make than it used to, which helps it stay competitive.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
