Trump's Tariffs Worry A Small Steel City In Pennsylvania

Jun 8, 2018
Originally published on June 8, 2018 2:21 pm

Dan Moore, a 58-year-old steel mill worker, gives the president an A+ on everything from tax cuts to foreign policy, but he is not so sure about tariffs.

"We need tariffs, but when it starts to impact the company where you work ... you're thinking, well wait a minute, time out!" he said.

Moore is worried the tariffs might cost him his job. The mill where he works, NLMK Pennsylvania, in the town of Farrell, not far from the border with Ohio, employs 750 workers and is a subsidiary of Novolipetsk Steel, or NLMK, Russia's top steelmaker.

But even though NLMK is creating American jobs, the company is being hit with a 25 percent tariff on steel because it imports raw steel slabs from Russia before turning them into coils in Pennsylvania and then selling that steel to customers that manufacture cars or pipes, for example.

Bill Almashy, a 48-year-old crane operator at the mill, worries that NLMK might not be able to survive the tariffs.

He knows what it is like to lose a steel mill job. This is the third mill he has worked at in recent years. One of the previous mills went bankrupt; the other moved most of its jobs to Mexico. Along the way, Almashy lost his home, his pension and his 401(k).

"A lot of steel in America is gone," he said. " Basically our politicians failed us."

And so when he first heard about President Trump's tariffs, he "applauded" the president. He says he still does but doesn't understand why his company should be punished for importing steel.

"Even if they're foreign-owned, but they have a factory in this country and they're employing American workers, to me, that's an American company," Almashy said.

To him, exempting this Russian-owned steel mill from tariffs would be a matter of putting "America First."

And that's the crux of the debate.

Moore voted for Barack Obama in 2008 and 2012, but during the last presidential election, he became enamored with Donald Trump's promise to bring back jobs and renegotiate trade deals. He thought tariffs in the abstract would be beneficial, but now that they could hurt the company he works for, he thinks the Trump administration needs to re-evaluate the idea.

"Tariffs — they may help some people, but they're gonna hurt a lot of people too. I don't know exactly how you balance that," Moore said. "Maybe it's not the right time for tariffs." Maybe, he says, the president ought to focus more on wages and jobs instead.

Moore is about to head into the mill down the road for his shift. He is wearing a dark blue work uniform shirt over his round belly and a Trump hat over his graying hair. It's a souvenir he picked up during Trump's inauguration.

Moore insists he has "no regrets" about his vote, even though he knows some might think that's strange given the precariousness of his current employment due to the very tariffs Trump introduced.

"President Trump was the better candidate," he says flatly.

Plus, he thinks the president is receptive to feedback.

"I have plans to write a letter to President Trump or maybe a personal phone call," Moore said. He believes that if he can get the president's ear, he might be able to persuade him to give NLMK an exemption for the 3 million tons of semi-finished steel slabs it wants to import from Russia.

NLMK, which also has a mill in Indiana, applied for an official exemption from the tariffs with the Department of Commerce in March, arguing that it cannot find enough domestic steel slabs to purchase.

But that application is still pending. The Commerce Department has said the review process should take roughly 90 days and it will consider requests for exclusions of "certain products determined not to be produced in the United States in a sufficient and reasonably available amount."

Critics say NLMK is exaggerating its supply problem because it wants to continue buying slabs at a steep discount from its parent company in Russia, whose majority shareholder Vladimir Lisin is the wealthiest person in that country. In a statement to NPR, the company did not comment on Lisin but strongly denied it is trying to buy "cheap foreign slabs."

"I hate to say it, but in a lot of ways NLMK is the boy who cried wolf," said Scott Paul, president of the Alliance for American Manufacturing, a group that has been supportive of the president's steel tariffs. Paul is skeptical that NLMK would actually close its Pennsylvania (or Indiana) mill because of the steel tariffs. "A lot of companies will need to make adjustments ... finding new domestic suppliers," he said.

Paul says right now there may not be enough domestic steel slabs available for purchase, but that will change because of the tariffs.

Three U.S. steel companies, AK Steel, U.S. Steel and Nucor, have filed objections to NLMK's request for an exemption.

The Commerce Department will ultimately decide who is right.

But some people in Farrell cringe at the possibility of Washington, D.C., determining their fate.

Michael Ceci, Farrell's city manager, says tariffs are "an abomination" for his community.

Outside his office, dilapidated homes and boarded-up storefronts line the broken brick roads of this once booming steel city in Western Pennsylvania. In the busy days, Carnegie Steel housed multiple blast furnaces that melted hundreds of tons of steel a year. Most of that is just a faded memory these days.

Farrell has gotten rusty. It has struggled financially in recent decades, though Ceci says the city was finally doing a bit better because of NLMK.

"We've gotten high-paying jobs at this mill, it's really helping and now you're gonna change the rules again and make us start over again?" he asked. "Because of decisions made at the national level by politicians who are not in touch with what's happening on the ground with the people who live here."

Ceci says a quarter of the city's $3 million general fund comes directly from NLMK through property taxes and income taxes, and if it were to shut down, it would crush the city financially.

"I would not figuratively but literally leave the keys on the desk, the lights will get turned off when the power doesn't get paid. And that's it," he said, dangling his office keys and dropping them on his desk for emphasis. "The state could come in and run [the city] because the revenue would not be here to provide the basic services."

Locals mostly agree that Americans have been hurt by unfair global trade, but they also plead against tariffs on their local mill.

Loren Holler, drinking a Budweiser with his wife at the bar in Farrell's VFW hall, is one of the few contrarians.

He says if NLMK goes out of business it'll hurt a lot of people, but he still thinks the benefits of the steel tariffs nationwide outweigh the economic damage his individual community will face.

"I think tariffs are good," said Holler. "You can't cry wolf because you've been robbing the bank."

But for Moore, it's hard to think about the overall national benefits, because he is worried about his own future. He hopes he doesn't get laid off. At 58, he is not sure where else he would go.

"Every day I have to try to stay focused on the job, but you have that question in your mind — how much longer do I have before I get my pink slip?" he said.

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DAVID GREENE, HOST:

We're going to visit a small town in Western Pennsylvania now that's worried about losing steel jobs. Several hundred people work for NLMK in Farrell, Penn. This is a Russian-owned steel mill that uses Russian steel, and so it's being hit by a 25 percent tariff. This mill is in an area that backed President Trump. And so its fate really speaks to the complicated politics around the president's trade policies. Here's NPR political correspondent Asma Khalid.

ASMA KHALID, BYLINE: Dan Moore is one of those guys who voted for President Obama in 2008 and 2012. But he became enamored with Donald Trump's promise to bring back jobs and renegotiate trade deals.

DAN MOORE: Right now there's a pretty fair amount of uncertainty with the steel tariffs.

KHALID: I meet Moore near the entrance to the NLMK steel mill about an hour before he's got to get to work inside. He's wearing a Donald Trump hat, a souvenir he picked up at the inauguration. He gives the president an A-plus on a lot of things, but he's not so sure about tariffs.

MOORE: Tariffs are - they may help some people, but they're going to hurt a lot of people, too. I don't know exactly how you balance that.

KHALID: NLMK, where he works, depends on steel from Russia. And it wants to import 3 million tons a year.

MOORE: It's kind of like - OK, well, we need tariffs. But when it starts to impact the company where you work for, now you're like, whoa. Wait a minute. Time out. (Laughter) Let's take a closer look at this.

KHALID: Do you at all regret your vote?

MOORE: No, I don't regret my vote 'cause I certainly think President Trump was the better candidate.

KHALID: Plus, he thinks the president is receptive to feedback.

MOORE: I have plans to write a letter to President Trump or maybe a personal phone call.

KHALID: Moore says, if he can get the president's ear, maybe he could convince him to give NLMK an exemption. The company officially applied for an exemption with the Commerce Department in March, but that application is still pending.

Moore says he thought tariffs would help the country. But now he's just nervous about his own future.

MOORE: You know, every day, I have to try to stay focused on my job. But you have that question in your mind - how much longer do I have before I get my pink slip?

KHALID: As we walk, we pass boarded-up storefronts and dilapidated houses. Up the road from NLMK, I meet Farrell's city manager, Michael Ceci. He sounds glum. He says he doesn't know if the company can stay in business with a 25 percent steel tariff. And if it doesn't, that would crush the city financially.

MICHAEL CECI: I would - not figuratively but literally...

(SOUNDBITE OF KEYS CLINKING)

CECI: ...Leave the keys on the desk. The lights will get turned off, and the power doesn't get paid. And that's it.

KHALID: Ceci says a quarter of the city's revenue comes directly from an NLMK through property taxes and income taxes. And he is frustrated because Farrell has had a hard time, and now life in this city finally seemed to be getting a tad better with NLMK.

CECI: We've gotten 700 great jobs, high-paying jobs at this mill. It's really helping. It's a spark of life. And now you're going to change the rules again and make us start over again.

KHALID: NLMK's argument is that it can't find enough steel to work with in the U.S. So it imports it from Russia to produce coils in Pennsylvania. But it's an argument that's up for debate. Tariff supporters say it's true. Maybe right now there is not enough domestic steel, but that's changing precisely because of the tariffs. And critics are skeptical NLMK would really shut down. They say the company is exaggerating the supply problems because it wants to continue buying cheaper steel from Russia. In a statement to NPR, the company strongly denied it's doing this. The Commerce Department will ultimately decide who's right.

Bill Almashy, though, who also works at the mill, just hopes he doesn't lose his job.

BILL ALMASHY: If it would go down because they don't get the exemption, this will be the third steel mill I've closed.

KHALID: I meet Almashy in a park with his daughter. He tells me he's worked at two other mills. One went bankrupt. The other moved most of its jobs to Mexico. Along the way, he lost his home, his pension and his 401(k).

ALMASHY: A lot of steel in America is gone. Basically, our politicians failed us.

KHALID: Almashy says Americans need to get back to buying American products. And so when he first heard about President Trump's tariffs, he liked the idea. He told me he still does. But he doesn't understand why his company should get punished for importing steel.

ALMASHY: Even if they're foreign-owned but they have a factory in this country and they're employing American workers, to me, that's an American company.

KHALID: To Almashy, exempting this Russian-owned steel mill from the tariffs would be putting America first.

Asma Khalid, NPR News, Farrell, Penn. Transcript provided by NPR, Copyright NPR.