Iron and Steel Primary Production Employment

Down, down, down.

Figure 1: Employment in iron and steel mills and ferroalloy production (NAICS3311), 000’s, s.a. (blue, on log scale). Light orange denotes Trump administration. Source: BLS.

If iron and steel primary employment looks anything like primary metal production overall employment (and it does – Rsquared = 0,81), December employment will be yet again lower.

To add insult to injury, not only is raw steel employment not rising, downstream producer employment is hurting so that the Trump administration is setting in motion cascading protection. From Chad Bown:

On January 24, 2020, Trump delivered some of those tariffs for a handful of high-content steel products, including steel nails and car bumpers. While his new tariffs did not cover kegs, Trump implicitly acknowledged Czachor’s concern by motivating his tariffs because imports of these sorts of high-content steel products had increased. But the increase in imports was due at least in part to American consumers of nails and bumpers switching to foreign suppliers to avoid paying for the American versions of products that Trump’s tariffs had made more costly.

Economists refer to a second round of tariffs on products hurt by earlier duties as “cascading protection.” These sorts of cascading barriers are worrisome for two other reasons aside from the economic impact of Trump’s new tariffs.

16 thoughts on “Iron and Steel Primary Production Employment

  1. New Deal democrat

    The American Iron and Steel Institute publishes weekly updates on steel production. Here is my latest description of its YoY trajectory for the past several years:

    Beginning in spring 2018, this was positive. In 2019 the YoY comparison abruptly declined to less than 1/2 of its top range of over 10% YoY, and was neutral generally during summer 2019. By autumn, it was almost exclusively negative. Since the beginning of this year. it has been positive again.

    If the weekly production updates remain positive, I would expect the downturn in employment to end shortly.

    Reply
    1. pgl

      Coal mining employment peaked at nearly 90 thousand by the end of December 2011 but then dramatically fell to less than 50 million just before the 2016 election:

      https://fred.stlouisfed.org/series/CES1021210001

      So yea – the liar that Trump is made some hay campaigning on promises of bringing back “high paying” coal jobs (even though their pay is not that high). Employment did inch up to just over 52 thousand by late 2019 but since then? It is back to 51 thousand. Trump failed to deliver. Go figure!

      Reply
  2. pgl

    American Keg Company? Here is an interesting trade tail involving this player:

    https://www.inquirer.com/business/trump-budweiser-china-imports-beer-american-keg-subsidies-20191102.html

    Here’s a brewing trade spat: Budweiser, “the King of Beers,” comes in Chinese-made kegs. That’s what American Keg Co. of Pottstown, the only U.S. company still making stainless steel beer kegs, discovered after it filed antidumping complaints against Chinese, German, and Mexican keg makers last year. The U.S. Commerce Department recently found merit in American Keg’s claims of unfair trade practices, and now the government is poised to slap harsh duty penalties on hundreds of thousands of foreign-made kegs in early December. It’s one of about 185 dumping cases undertaken by the Trump administration that have targeted the huge Chinese trade deficit as bad for the U.S. economy. St. Louis-based Anheuser-Busch LLC opposes the penalties on imports from the three countries and warned last week of foamier beer prices. Trade experts say Chinese kegs could more than double in price. German keg-maker Blefa also opposes the duties. But around Philadelphia, some craft brewers are pulling for 32-employee American Keg. “I hope they make it,” said Brian O’Reilly, a brew master and partner at Mainstay Independent Brewing on Delaware Avenue. “They are a Pennsylvania company, and we are a Pennsylvania company.” O’Reilly added that “it’s important to have someone in the United States making kegs. We could certainly import them, but we could say that about everything.” O’Reilly recalled a period about 15 years ago when beer-keg supplies ran out for craft brewers. American Keg launched its keg-manufacturing business in Pottstown around 2016 after buying the assets of a former keg importer.

    Look – I generally say do not tax my beer. But then in my view Budweiser is not really beer. Give my a craft beer anyday!

    Reply
  3. pgl

    From the PIIE story:

    Nearly two years earlier, Paul Czachor, CEO of American Keg Company, had warned that Trump’s original tariffs would hurt companies like his and result in more protection of this sort. Czachor relied on so much steel that the cost increase driven by Trump’s steel tariffs meant his company would no longer be price competitive with kegs made in Germany and Mexico, let alone China. At the time, Czachor predicted, “for finished product that has a high content of steel, we’re going to need to see some help on those. Some tariffs.” On January 24, 2020, Trump delivered some of those tariffs for a handful of high-content steel products, including steel nails and car bumpers. While his new tariffs did not cover kegs, Trump implicitly acknowledged Czachor’s concern by motivating his tariffs because imports of these sorts of high-content steel products had increased. But the increase in imports was due at least in part to American consumers of nails and bumpers switching to foreign suppliers to avoid paying for the American versions of products that Trump’s tariffs had made more costly. Economists refer to a second round of tariffs on products hurt by earlier duties as “cascading protection.” These sorts of cascading barriers are worrisome for two other reasons aside from the economic impact of Trump’s new tariffs.”

    American Keg asked for tariffs on kegs (its output) not tariff on steel (its major input). Cascading protection is really Effective Rate of Protection – the concept Menzie asked everyone to think about a couple of years ago. Of course asking anyone at Team Trump to THINK is asking for way too much!

    Reply
  4. Moses Herzog

    Well, Menzie warned about “downwind” effects of the tariffs. effecting input costs to other American industries. Menzie has also mentioned the mishandling of the Section 232 while some commenters falsely accuse Menzie of being more “pro-China” than he is when it comes to Chinese government mismanagement/corruption. Menzie’s line has been well delineated there. (as if he should be “required” to do that anyway). Menzie has been hammering away on this for ages now, including Chad Brown (with 2-point basket assist from Hexuan Li) link he provides above.

    “The Office of the Inspector General in the US Department of Commerce had already voiced public concern over misconduct by Trump administration officials. In October 2019, it found that “certain communications by department officials suggest improper influence in the Section 232 exclusion request review process,” raising more questions about an already abstruse and ad hoc procedure for deciding which Americans get hit with tariffs.
    In the lead-up to Trump’s January 24 announcement, there was not even a hint that such tariffs were in the offing. No public hearing meant the administration failed to allow for possible counterarguments by those Americans who would be hurt by their protection. Even compared with the Trump administration’s poor prior record on transparency for tariff actions, this time was different.”

    I know of many other blog hosts less tolerant and generous than Menzie who would have banned those commenters by now. I’m glad Menzie doesn’t ban them as the transparency shows all offending parties for what they truly are. But one could hardly blame Menzie had he banned them out of shear exasperation from false accusations.

    Reply
  5. Moses Herzog

    I’m curious, as we are one day away from the New Hampshire primary, is Barkley Junior ready to admit that only a complete idiot would choose Copmala Harris as their VP running-mate at this point?? Or is Barkley Junior still enamored by his peculiar and solitary thoughts of a woman not even popular in her home state???

    I have found Barkley Junior’s opinions on politics a plentiful source of sidesplittingly comical entertainment in the last year, and am hopeful his Supreme Juniorness can provide a “yes” or “no” answer to this question.

    A prefatory “You’re welcome” to all those who get to read Junior’s answer.

    Reply
    1. ilsm

      I voted in NH primary on the retiree schedule, after early birds. No lines, maybe turnout will be not so “exciting”?

      I thought I would get by this primary season without seeing a politician at the diner for breakfast, but alas I got to talk to an out of state US congressman in a “Team Trump” fleece! I told him Bernie would win….. We will see if I am prescient.

      Reply
      1. Moses Herzog

        @ ism
        The poll numbers strongly support your argument on the results in NH, with Buttigieg having roughy a 33% shot at getting the most votes in NH, with a huge drop off in that percentage probability after your top 2 candidates in the state. I find your “anecdotal evidence” very interesting and am grateful you shared, as voting is often a personal thing for people.

        Where we live, mid to late morning is often the best time to vote, after the morning rush hour to work when people are commuting. I suspect this is what you were referring to and that this is semi-common in many states.

        Reply
  6. Moses Herzog

    I live for stories like this. However it is a bit on the confusing side as it doesn’t seem clear if Jill Tahija is still working at the paper. NYT seemed to imply she does, but then the words on the blog (from the 5th of February) strongly implied she was done:
    https://www.nytimes.com/2020/02/10/us/california-newspaper-sierra-messenger.html?action=click&module=Top%20Stories&pgtype=Homepage

    This 2nd link will give you the information you need to make a subscription if you believe in small town news and old-fashioned journalism. Of course for most people it will be a sentimental contribution, but hopefully someone out there will think about it. I know Menzie and Jim DO have some Cali readers of the blog.
    http://www.sierracountyprospect.org/2020/01/28/mountain-messenger-bloops-1-29-20/

    Reply
    1. baffling

      imports of chinese steel will probably slow as coronavirus shuts down production in china. not sure if us firms are in a position to grab market share while this occurs.

      Reply

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