Trump didn’t save coal or steel – to be fair, no one could

Remember when Trump said he was going to revive the steel industry? “Steel, we’re bringing back,” he told supporters in Pittsburgh during his first presidential campaign. In 2018, he imposed 25% tariffs on steel imports from China, Europe, Canada and Mexico, arguing that making imported steel more expensive would cause domestically produced steel to become more competitive.

Guess how that turned out? In an initial burst of enthusiasm, U.S. steel companies cranked up production and hired workers — only to lay many of them off when it turned out there simply wasn’t enough demand to buy the increased U.S. production. By 2020, U.S. Steel Corp. was laying off thousands of workers and idling some of its blast furnaces. Its stock price dropped by two-thirds from its 2018 peak. Meanwhile, companies that relied on steel had to raise prices on consumers. Many of them also laid off workers.

How about manufacturing jobs? Remember when Trump said he was going to stop companies from shifting production abroad and even bring manufacturing jobs back to the U.S.? Early on, Trump claimed to have cut a deal to keep a Carrier Corp. plant operating in the U.S. instead of moving to Mexico. But just eight months later, Carrier revealed that it was eliminating 338 jobs at the factory — and moving the positions to Mexico. Trump said he would punish companies that moved jobs offshore, but executives quickly realized he was never going to follow through on that threat.

“Under Trump, U.S. jobs are moving overseas even faster than before,” business website Quartz wrote in 2017. Two years later, the Guardian noted that since Trump became president, “nearly 200,000 jobs have moved overseas.” And just a few months ago, the Economic Policy Institute reported that between 2016 and 2018 — the most recent year for which data is available — “nearly 1,800 factories have disappeared” from the U.S. manufacturing base.

Let’s not forget China. Remember how Trump promised to shrink the trade deficit with China? China was one of the countries that was “stealing our businesses, stealing our jobs, stealing our money,” he said at one campaign rally. “We can’t continue to allow China to rape our country,” he said at another rally. “We will end our chronic trade deficits.”

To this end, he badgered the Chinese, negotiated with them, played nice (sometimes) and rough (sometimes). He imposed tariffs. He announced that big trade agreements were right around the corner. The outcome? In 2016, the U.S. trade deficit with China was $346.8 billion, according to Census Bureau data. Last year, the trade deficit was — are you ready for this? — $345.2 billion. All that Trumpian hullabaloo shaved a negligible $1.6 billion from the trade deficit with China.

In a normal election, Trump’s Democratic opponent would be hammering him for his abject failure to help the struggling blue-collar workers he wooed — and won — during his 2016 campaign. But, of course, this is anything but a normal election, with the coronavirus, the nomination of Amy Coney Barrett to the Supreme Court and Trump’s erratic behavior shoving aside most other issues.

But this set of issues — what to do about declining industries and the continued off-shoring of jobs — isn’t going to magically go away if Joe Biden is elected in November. So it’s worth thinking about why Trump failed so miserably — and whether anyone could have done any better.

Many people believe that Trump never truly cared about bringing back coal or steel — that what he cared about was cutting taxes for the rich and stopping immigration, and the rest was all for show. I don’t think that’s right — or at least it’s not entirely right.

It would seem in retrospect that the president never did much about bringing back manufacturing jobs besides make speeches. On the other hand, he clearly took actions meant to help coal and steel and to reduce the trade deficit with China. With Scott Pruitt as the administrator of the Environmental Protection Agency, the Trump administration rolled back many of the regulations coal executives said were damaging the industry. Tariffs were supposed to reduce the trade deficit and help U.S. steelmakers.

The problem wasn’t so much that he didn’t take concrete steps but rather that the steps he took failed to move the needle. Why did coal continue to decline? Because natural gas was both cheaper and cleaner, so power companies continued to replace coal-fired power plants with gas-fired plants — as they had been doing during most of Barack Obama’s presidency. Trump couldn’t upend either the free market or society’s desire to reduce pollution.

The trade deficit didn’t narrow, in large part, because Chinese companies have become such an integral part of U.S. supply chains — and tariffs couldn’t change that fact of modern business life. (Also, the Chinese lowered the price of many goods so that they would remain competitive.) As for steel, the tariffs again didn’t disrupt buying patterns the way Trump thought they would. It also didn’t help that China was already producing more steel than the world could absorb — and increased production by domestic steel companies would only make that worse.

One of the things the past four years have proved is that presidents can’t revive industries that are in structural decline. And that despite all the criticism heaped upon it, globalization is nearly impossible to reverse. Yes, Trump is a uniquely incompetent president, but Joe Biden, should he take the White House, is not going to be able to reverse these forces, either.

And he shouldn’t try. The country will be better off if the coal industry disappears. And there are simply too many U.S. companies that rely on cheap imported steel to make their products; raising the price through tariffs is going to hurt the economy far more than it will help the steel industry. Ultimately, it’s pointless to try to save industries whose time has passed.

What Biden should do — what has long been missing from government policy — is find ways to help the workers in these industries who are losing their jobs and their way of life. During all the years the domestic auto industry was shrinking, newly unemployed auto workers were left to fend for themselves. It is probably an overstatement to say that the loss of blue-collar jobs led to the opioid crisis — but it was certainly a contributor.

There are industries that government can help — but they’re the industries of the future, not those of the past. The Obama administration made federally guaranteed loans to battery companies and solar power companies. Some of companies went bust (Solyndra, anyone?), but others have gone on to be important players that are creating thousands of jobs and transforming industries.

Trump has failed to uphold many promises through his own malpractice, but rescuing dying industries isn’t among them. Presidents should concentrate on helping workers displaced by economic disruption and assisting innovation, not indulge in wishful thinking about a past that can never be recaptured.

(By Joe Nocera)