After having seemingly bounced back on top of the Trump administration's imposed tariffs on imported steel last year, US Steel Corp is now struggling to keep its books in the green. Reports revealed on Friday that US Steel is planning to permanently shut down its massive plant in Detroit, which will result in the layoff of around 1,575 workers.
Despite Trump's claims of "saving" the steel industry, US Steel is facing large financial losses amid slowed demand for its products and decreasing steel prices. US Steel CEO David Burritt previously praised Trump's imposed tariffs on imported steel, announcing that the company would be rehiring workers and restarting two of its blast furnaces as a direct result.
Just months after Trump imposed tariffs, US Steel revealed that it had to idle one of its plants just outside of Detroit. This caused the loss of around 1,500 jobs. Earlier in the year, the company also laid off around 200 of its workers in Michigan.
According to analysts, US Steel may have been forced to permanently idle its Detroit plant as the company struggles to compete with its rivals. The company has also been experiencing massive stock losses, with 2019 marking its third consecutive year of stock losses.
US Steel's stock prices fell to its lowest level on Friday, following the news of its plans to shut down its Detroit plant. US Steel initially saw growth in its stock prices following Trump's imposed tariffs on imported steel. However, the stocks have fallen by more than 70 percent since that time.
The company reportedly plans to invest the savings it will gain from shutting down its bigger plants to focus more on its smaller furnaces. US Steel also reportedly plans to enhance its re-melting and scrap steel refining operations, while also dialing down its iron ore processing activities.
US Steel spokeswoman Amanda Malkowski clarified that the closure of the company's Detroit facility doesn't mean that Trump's tariffs were not effective. Malkowski explained that the government's support has had an impact on the industry long-term recovery. Commerce Secretary Wilbur Ross echoed the company's sentiments and stated that US Steel likely decided on the closure as the plant was just too expensive to operate.
Industry experts however disagree; with most stating that the US Steel industry will likely continue to decline despite the US government's support. The steady decline in steel prices globally is predicted to force US steel producers to shut down capacity and focus more on their shrinking product portfolio.
