Energy Secretary Chris Wright talks steel tariffs, the U.S. steel industry and the future

The Trump administration's latest attempt to prop up American steelmaking, which has struggled for much of the past half-century, came with an infusion of cash to Cleveland-Cliffs, highlighted by a visit from Energy Secretary Chris Wright. 

KDKA-TV spoke with Wright on Tuesday, discussing why the federal government has taken such an active role in supporting the industry. 

Wright spoke in front of a crowd of steelworkers at Cleveland-Cliffs Butler Works in Butler Township, Butler County, celebrating the government awarding $75 million to the plant. It's part of a $200 million investment toward making steel needed to produce power transformers. 

"The Trump administration is unleashing the energy industry so we can reindustrialize the country," Wright said. "You've got to have an energy grid that can expand and grow." 

Government saves Cleveland-Cliffs Butler Works

Just a few years ago, the plant, which employs more than a thousand people, had been slated to shut down, leaving the United States without a facility that produces grain-oriented electrical steel, which is used in power and distribution transformers, the company's CEO Lourenco Goncalves said.

"It would be absolutely idiotic, stupid, to let the last plants producing electrical steels to go away," Goncalves said. 

He explained that if that happened, the U.S. would be forced to import the same steel from other countries, making the grid more susceptible to being hacked, according to Goncalves. 

"The plant was going down. We save it, we improve it," he added.

Allowing for the plant to be saved, Goncalves heavily credited President Trump.

"We would not be making money if the president of the United States was not Donald J. Trump," he told the crowd on Tuesday. 

When asked by KDKA-TV how the U.S. government saved the plant, Goncalves pointed to Mr. Trump's use of Section 232 national security tariffs. 

"These things don't resolve with words," Goncalves said. "It's action, complicated actions, complicated trade actions to protect not only steel but derivative product." 

Wright one-on-one on tariffs

In his interview with KDKA-TV, Wright said the tariffs are allowing steel production to grow again.

"We recently passed Japan," Wright said. "America is now the third-largest steel producer, thanks to President Trump's efforts to help reignite the steel industry's growth and future."

He said it's an example of how they have supported the steel industry, which has struggled. KDKA-TV asked Wright how tariffs fit with the Republican Party, which has traditionally championed free market capitalism.

"The Republicans are still free market capitalists, but we recognize there's been areas of the market that have been anything but free or fair. China has strategically set out to destroy the U.S. steel industry," Wright said. "They figure if they run everyone out of business, then we'll be dependent upon them, and they have strategic leverage on us. So, we're using market forces to level that playing field. Still, businesses competing, but saying if they're dumping at below cost, we're not going to allow that."

But an administration only lasts four years, and there is no guarantee the next administration keeps the tariffs in place. KDKA-TV asked Wright, with that in mind, how they can make sure the growth is sustainable. 

"Number one is the enormous construction jobs that have been added so far in this administration," Wright responded. "These are all building new manufacturing plants and new factories that, in the coming years, will open. This will be an absolute jobs boom for middle America and for blue-collar America. I think it'll be hard to stand in the way of that trade when it gets moving."

KDKA-TV also asked Wright about the decline of the steel industry that people in western Pennsylvania have witnessed firsthand, asking if it's the administration's hope that the jobs lost will come back. 

"We're convinced those industries will come back," Wright said. 

Experts weigh in

We asked Chris Briem, a University of Pittsburgh professor and author of the book "Beyond Steel: Pittsburgh and the Economics of Transformation," about Wright's comments. 

"It's important to sort of separate out the fate of the American steel industry with what's going on here in Pittsburgh," Briem said. "It may be that federal policies can bring back steel production or increase steel employment. There's less reason to believe it would be concentrated here in Pittsburgh. Certainly not in the way that it was in the past."

He said many other regions of the country are now attracting new investment in the steel industry, leaving less room for the Pittsburgh region. Jeremy Weber, who teaches at Pitt and researches the policy and economics of environmental and energy issues, said there is a long-term downward trend that has faced the American steel industry and manufacturing as a whole in the country. 

"The U.S. government has tried at various times, certainly in the last 10 years or so with the two Trump administrations, to try to bolster that or to stem the tide of that trend," Weber said. "It's unclear if the federal government holds within its powers the ability to reverse that trend or stabilize it. Time will tell." 

He said the government has used tariffs. In the case of Cliffs, the government awarded them cash. Companies relying on the government for help creates the precedent of a slippery slope, Weber said. 

"It tends to create incentive [for politicians] to continue to be involved and to support," Weber said. 

Back at Cleveland-Cliffs Butler Works, Goncalves said its fight as a company isn't over. 

"Cliffs continues to fight for survival every day," he said.