The U.S. Department of Commerce's Section 232 report, used by President Donald Trump to impose tariffs on some steel and aluminum imports, paints a stark portrait of an industry in decline.
While Indiana has held onto its role as the nation's top producer, the study found the steel industry in America has been struggling since the turn of the century. A total of 10 blast furnaces have been shuttered or idled in the United States since 2000, a 50-percent reduction that was attributed to foreign competition and excessive imports. Employment in the steel sector has fallen by 35 percent since 1998.
In fact, the entire American steel industry has been losing money since 2009, until prices rose last year in anticipation of further tariffs.
"The declining steel capacity utilization rate is not economically sustainable," the U.S. Department of Commerce found in its report. "Utilization rates of 80 percent or greater are necessary to sustain adequate profitability and continued capital investment, research and development, and workforce enhancement in the steel sector."
The United States is the world's largest importer of steel, with four times as many imports as exports. China made as much steel in the average month as the United States does in a year, and is largely responsible for the excess global capacity of 700 million tons, which is almost seven times the amount of steel the United States consumes in a year.
"China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity," the U.S. Department of Commerce found in the Section 232 report. "Their excess capacity alone exceeds the total U.S. steel-making capacity."
Steelmaking capacity worldwide has skyrocketed since 2000, while demand has barely grown over the same period. That creates an incentive for foreign steelmakers to unload unsold inventories in the United States, a huge market with open borders.
"While U.S. steel production capacity has remained flat since 2001, other steel-producing nations have increased their production capacity, with China alone able to produce as much steel as the rest of the world combined," the U.S. Department of Commerce reported. "This overhang of excess capacity means that U.S. steel producers, for the foreseeable future, will face increasing competition from imported steel as other countries export more steel to the United States to bolster their own economic objectives and offset loss of markets to Chinese steel exports."
Even before Trump's authorization of new tariffs last week, the United States was imposing nearly 170 antidumping and countervailing tariffs on steel, including 29 duties against China alone, according to the report. Another 25 tariff investigations are underway.