On multiple occasions, Donald Trump has highlighted how Section 232 tariffs have revived the steel industry—US steel companies’ earnings spiked last year, and in some cases, their higher profitability has been shared with employees. U.S. Steel Corporation (X) agreed to a wage hike last year, Steel Dynamics paid a $1,500 bonus to eligible employees, and Nucor (NUE) employees’ salaries may have risen YoY (year-over-year) last year.
As new plants announced last year have started coming online, US steel jobs are expected to increase. However, while overall US job markets have been strong, not many steel jobs were added last year—in fact, based on U.S. Steel’s annual report, its US employee count fell YoY by 200. Also, on the downstream side, there have been some job losses in the automotive space. Last year, General Motors (GM) announced plant closures that could lead to thousands of job losses, and Tesla (TSLA) fired some employees. Whereas these layoffs may not be directly connected to the metal tariffs, higher steel and aluminum costs may have impacted the companies’ profitability.
The above developments highlight that downstream-metal-using industries are far bigger contributors to the US economy (SPY) than are upstream steel producers. For instance, the job loss linked to GM’s plant closures could be much bigger than the gain in steel jobs resulting from post-tariff investments. After steel and aluminum, automotive imports could also be on Trump’s radar, which we’ll discuss next.