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ILLINOIS ECONOMY

Trump says re-opening of Illinois plant is proof his tariff move will benefit American workers

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WASHINGTON — The Trump administration is using the reopening of an Illinois steel plant as immediate proof newly imposed tariffs on imported steel from some countries is already paying benefits.

In a background briefing leading up to President Donald Trump’s announcement that tariffs would be placed on imported steel and aluminum, a senior Trump administration official singled out U.S. Steel Corp.'s decision to put roughly 500 workers back on the job by restarting one of two idled blast furnaces and associated steelmaking facilities at its Granite City works in Madison County. 

The president himself later mentioned U.S. Steel's announcement in a ceremony depicting the tariffs at the White House's Roosevelt Room. He called the reopening of the Granite City plant east of St. Louis a "big one" and predicted it would be repeated in closed plants elsewhere.

That announcement was made Wednesday and put “some of the biggest smiles” on steelworkers’ faces, said Dan Simmons, President of United Steelworkers Local 1899 in Granite City.

“Very important facility that has shut down for two years,” said the senior Trump adviser, whom the White House communications staff would not allow to be identified by name in order to give Trump more of the spotlight in his late afternoon announcement.

“They will have 500 steelworkers back on the job and they will be making an additional 1.5 million tons of raw steel a year,” the official said. “And that is going to really contribute to our national and economic security.”

Trump, flanked by steelworkers from several states, said he was fulfilling a campaign promise, but that he had acted on a belief he had held for 25 years that "we have been treated so badly over the years by other countries" on trade.

"Yesterday, in anticipation that we’d be here today, U.S. Steel announced it’s reopening a mill in Illinois, a big one, and recalling 500 workers immediately. That’s going on all over the country," Trump said. 

About 2,000 workers were laid off when the Granite plant closed in December 2015. Pittsburgh-based U.S. Steel said it is restarting operations due to anticipated demand for more U.S. steel in response to Trump's tariff announcement.

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Trump Trade

President Donald Trump holds up a proclamation on steel imports during an event in the Roosevelt at the White House in Washington on Thursday. He also signed one for aluminum imports. 

Stocks finished with modest gains Thursday after Trump formally ordered tariffs on steel and aluminum imports with the terms were less harsh than investors had feared.

The tariffs – 25 percent on steel and 10 percent on aluminum – also have created worry that they could launch a trade war that could increase inflation at home and harm U.S. exports, starting with farm commodities. 

The tariffs will take effect in 15 days, with Canada and Mexico indefinitely exempted "to see if we can make the deal," Trump said. The president said he would exempt the countries while negotiating for changes to the North American Free Trade Agreement.

"The American aluminum and steel industry has been ravaged by aggressive foreign trade practices. It's really an assault on our country. It's been an assault," Trump said at the White House. He was joined by steel and aluminum workers holding white hard hats.

American steel and aluminum workers have long been betrayed, but "that betrayal is now over," Trump said. The former real estate developer said politicians had for years lamented the decline in the industries, but nobody was willing to take action.

Business leaders, meanwhile, have continued to sound the alarm about the potential economic fallout from tariffs, with the president and CEO of the U.S. Chamber of Commerce raising the specter of a global trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump's rollback of regulations.

"We urge the administration to take this risk seriously," Donohue said.

U.S. Rep. Rodney Davis, R-Taylorville, praised the reopening of the steel plant, which resides just outside the southwestern part of the 13th Congressional District. While admitting he is not an overall fan of tariffs, Davis said the status quo was unacceptable and hoped the limited scope of the tariffs, specifically the exemptions of Canada and Mexico, will not lead to retaliatory tariffs that would harm the agriculture or manufacturing industries.

"I think it shows the action may benefit the steel industry in the United States and not adversely impact agriculture, which I hope is a win-win," he said. "But time will tell if the administration will go beyond what they’ve announced today. And if they do, we’re going to try our best to make sure there is no adverse impact on agriculture or manufacturing in Central Illinois."

U.S. Sen. Tammy Duckworth, D-Ill., said welcomes "the news that hundreds of steelworkers are going back to work in Granite City after being laid off more than two years ago" but is "alarmed by the president’s haphazard announcement and reckless threats about trade wars, which are causing chaos and confusion in other American industries while creating barriers for key allies and trading partners who play by the rules."

In a statement, her office said "Illinois’ steel industry supports 64,000 jobs, including over 9,400 jobs at steel mills, which could be at risk if the Trump administration does not take action to curb illegal steel dumping."

"It’s not clear that these broad tariffs will ultimately benefit the American workforce, economy or consumers in the long run," the senator said. 

Other politicians — including members of Trump's Republican Party — worry that Trump, by trying to tie the tariffs to ongoing re-negotiations of the North American Free Trade Agreement, could fray vital trade and strategic partnerships with neighbors Canada and Mexico.

A total of 107 House Republicans signed a letter opposing the tariffs. It warned that "tariffs are taxes that makes U.S. businesses less competitive and U.S. consumers poorer."

The senior Trump official ridiculed such concerns as “hair-on-fire rhetoric,” and declared: “There will be no significant price effects or inflationary effects.” He said the tariff statements signed by Trump would have the "flexibility" to negotiate better treatment of U.S. exports with national security allies.

The senior administration official said Trump advisers have calculated that the tariffs could add 1.5 to 2 cents to the price of a beverage can.

Trump told reporters before his announcement that “alumimum and steel are the backbone of our nation” and that “we’re going to protect the American worker.”

The tariff decision is already playing big in Illinois’s 12th congressional district race, where the Granite City works are located. Rep. Mike Bost, R-Murphysboro, has broken with many of his Republican colleagues and supported Trump’s move.

But the steelworkers’ union has endorsed Democrat Brendan Kelly, the St. Clair County attorney, who is running for his party’s nomination to oppose Bost in the November election. It is one of several dozen congressional races around the country targeted by Democrats in their attempt to take control of the House of Representatives in 2019.

The massive Granite City plant in Madison County makes steel used in construction, tubing and piping. 

U.S. Steel President and CEO David B. Burritt this week said the Granite City region has "suffered too long from the unending waves of unfairly traded steel products that have flooded U.S. markets."

The Belleville News-Democrat and Herald & Review's Ryan Voyles contributed to this report. 

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