Trump steel tariffs may leave these U.S. steelworkers jobless

By Nick Carey

FARRELL, Penn., March 9 (Reuters) - Mick Lang has been asteelworker for nearly 40 years and voted for businessman DonaldTrump in the hopes he would bring about a renaissance for thelong-suffering U.S. steel industry - now he worries PresidentTrump's tariffs on imports of the metal will cost him his job.

"This is not what I voted for. I voted for Trump because Ithought he'd straighten things out, not do something like this,"said Lang, 59, a third-generation steelworker, whose son alsoworks at the same steel mill in Farrell in westernPennsylvania's Mercer County.

The county voted for then-Republican candidate Trump by morethan 24 points in the 2016 U.S. presidential election. SomeRepublican strategists said Trump's tariffs appeared partly tobe timed to sway voters in Pennsylvania steel country, where aspecial election is being held for a U.S. House ofRepresentatives seat next Tuesday.

Trump is scheduled to visit Moon Township about 60 milessouthwest of Farrell on Saturday to support the Republicancandidate and he is expected to be warmly received in an area healso won handily in 2016. U.S. steel companies such as U.S.Steel Corp and AK Steel Holding Corp - seen aswinners thanks to the president's actions - have lauded Trump'stariff on imported steel.

U.S. Steel said it would restart one of two idled blastfurnaces at an Illinois steel plant, creating up to 500 jobs.

America is the world's largest steel importer, buying about35 million tons in 2017. GRAPHIC: http://tmsnrt.rs/2oPeo1z

But Lang is one of around 780 workers at the NovolipetskSteel PAO (NLMK) mill, NLMK's U.S. subsidiary whichimports around 2 million tons of steel slabs annually from itsRussian parent company. The slabs that the mill rolls intosheets for customers including Caterpillar Inc, Deere &Co Harley Davidson Inc and Home Depot Inc,are almost impossible to acquire from U.S. steel producers.

Bob Miller, Chief Executive Officer of NLMK's U.S. unit,said if his company's customers refuse to accept a 25 percentprice hike as a result of the tariffs, nearly 1,200 workerscould eventually lose their jobs - and the ones in Farrell wouldbe the first to go when supplies of imported slabs run out.

The U.S. steel industry employed about 147,000 people in2015, according to the Commerce Department's Bureau of Economicanalysis. Manufacturers that need steel employ about 6.5 millionpeople each year and the construction industry 6.3 million.GRAPHIC: http://tmsnrt.rs/2Fc94hU

IRONY

Miller said tariffs will also force NLMK to shelve planned$600 million investments in plants in Pennsylvania and Indiana,around $400 million of which was earmarked for upgradingantiquated equipment at its Farrell plant.

Trump has stood by the tariffs, despite resistance from hisfellow Republicans and other countries, which have vowed torespond with levies of their own. On Thursday, Trump pressedahead with the imposition of 25 percent tariffs on steel importsand 10 percent for aluminum.

Some steel executives such as Miller say this is theultimate irony: by acting ostensibly to protect U.S. steel jobswith sweeping tariffs, Trump will also kill off some steel jobs.

"The workers here in Farrell are on the front line," Millersaid. "This policy is picking winners and losers andunfortunately, we are the losers."

The tariffs are good for steel producers that melt andproduce their own steel. But for those like NLMK, which isreliant on imported raw materials, they could provecatastrophic.

The mill is the largest employer in Farrell and accounts formore than one fifth of the town's tax base. Mercer County has apoverty rate that is nearly double the national average.

The area was America's steel heartland, with mills dottingthe landscape until the industry's decline began in the 1970sbecause of an increase in global competition. The mill owned byNLMK has existed since the beginning of the 20th century, butexperienced two lengthy shutdowns and mass layoffs in the 1990s.

Its blast furnace was sold for scrap and instead ofproducing steel, its current crop of workers heat 25-tonimported steel slabs to a glowing-orange temperature of 2,400degrees fahrenheit (1,316 celsius) before rolling them down insome cases to as thick as a few sheets of paper.

Amid blasts of steam, intense heat, dirt and noise, themill's 600 union-represented workers earn up to $27 per hour, asolid middle-class wage.

Terry Day, local president for the United Steelworkersunion, said the 1990s shutdowns convulsed the community andresulted in a spate of suicides and divorces.

"This time it will be much worse," said Day, 53, whoexperienced both shutdowns. "Back then there were other jobs togo to, but now there's nothing else here."

"It would be devastating."

Steel customers ranging from automakers General Motors Co- which makes its Cruze sedan in Lordstown, Ohio, around20 miles west of Farrell - and Ford Motor Co to soup makerCampbell Soup Co and brewer Molson Coors Brewing Coare expected to lose, as tariffs will allow domesticsteel producers to raise prices.

But likely job losses within the steel industry run counterto Trump's professed aims of bringing back manufacturing jobs.

"There is a substantial number of people in the steelindustry that could lose their jobs as a result of tariffs,"said metal analyst Charles Bradford of Bradford Research.

Farrell can ill afford to lose its NLMK steel jobs.

The town's population of under 5,000 is less than a third ofwhat it was in 1920. As of June 2017, there were around 11,000steel jobs in Pennsylvania, 2 percent of the state's 546,000manufacturing jobs. Mercer County had 5.5 percent unemploymentin December - above the state rate of 4.8 percent and thenational rate of 4.1 percent.

The Farrell mill was originally owned by a U.S. firm thatwent bankrupt in 1992 and was subsequently owned by British andSwiss companies before the Russians bought in back in 2006.Since then, NLMK has invested around $1 billion in its U.S.operations, U.S. CEO Miller said.

Miller is working to lobby the Trump administration tofollow the precedent of former Republican President George W.Bush's administration, which allowed quotas for slab steel in2002 rather than applying tariffs as it did for products thatwere domestically produced.

Those quotas allowed the Farrell plant to keep operating andMiller hopes the Trump administration will follow suit.

The mood in Farrell is grim and fearful. Truckers coming topick up coils of rolled steel ask when the mill will go out ofbusiness and plant manager Bill Benson says workers keep askinghim: "What on earth is Trump thinking?"

(Reporting by Nick Carey; additional reporting by JessicaResnick-Ault; editing by Grant McCool)