“Once you put a tariff on a raw material, companies have to deal with price distortion,” said Katheryn Russ, associate professor of economics at the University of California, Davis. “The tariff squeezes their profits, and that can cause them to produce less, hire fewer people or make inefficient substitutions in their production process.”
Steel producers including United States Steel Corp. X 4.79% remain supportive of the tariffs, saying they helped secure the U.S. manufacturing base. But domestic steel producers that turn mattress-size slabs of imported steel into finished sheet steel said they are hurting.
Pittsburgh-based Allegheny Technologies Inc. ATI -3.59% abandoned its stainless-steel business this summer, and NLMK USA, a division of a Russia-based steelmaker, has laid off one-quarter of the 600 employees at its Farrell, Pa., rolling mill after failing to receive Commerce Department tariff relief on slabs.
“The government picked winners and losers here,” said Bob Miller, chief executive of NLMK USA.