WV Center on Budget and Policy > Blog > Economic Development > Could Surging Steel Imports Lead to the Further Decline of West Virginia Manufacturing?

Could Surging Steel Imports Lead to the Further Decline of West Virginia Manufacturing?

A new report from the Economic Policy Institute outlines the recent risk to the U.S. steel industry from a rapid increase in steel imports. According to the report, in facing the lack of demand in the aftermath of the Great Recession, steelmakers in other countries continued to add production capacity with government support. As the U.S. recovered from the recession, those countries have leveraged their excess capacity, exporting the surplus at below-market rates, with the U.S. as the major target for exports.

U.S. steel imports increased from 28.5 million net tons in 2011 to 32.0 million net tons in 2013, and have grown even more this year. Imports have also grown relative to domestic production and consumption. The jump in imports has led to a decline in the domestic steel industry, with falling production and income, along with layoffs or reduced wages for thousands of workers.

The steel industry supports over half a million jobs in the U.S., including 6,200 in West Virginia. And as we showed in our 2013 State of Working West Virginia report, the fates of the steel industry and the rest of manufacturing, as well as the coal industry, are closely tied. The steep drop in coal mining and manufacturing employment in West Virginia during the 1980s was directly tied to the collapse of the region’s steel industry.

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In the past, trade remedies have provided relief to the U.S. steel industry from the stress of overcapacity, excess supply, and subsidized steel exports, and their effective use can make a difference again. Other efforts, like West Virginia’s Buy-American proposal, would require the use of U.S.-manufactured products in taxpayer-funded projects in the state, encouraging domestic production over foreign imports.

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