Will the local steel industry get Trumped?

Will president-elect Donald Trump’s promises to boost manufacturing and reinvigorate the US steel industry have any effect on local steel production? Experts say we will have to wait and see.

Robert Wolfe, a professor with Queen's University School of Policy Studies, said if the US economy starts to accelerate, the Canadian economy should benefit.

He notes, however, the Canadian steel industry could be negatively affected if Trump enacts a Buy American policy to go along with proposed infrastructure spending.

In October, Trump released plans to spend $1-trillion on infrastructure projects over the next 10 years.

“Members of his own party in congress won’t be happy with that, but he may convince them to do it. One of the ways he might buy the votes in order to do that is to put Buy American restrictions on it,” said Wolfe.

Enacting a federal Buy American policy would be illegal under the North American Free Trade Agreement (NAFTA), said Wolfe, but Trump might be able to find a way.

“At the state level, it gets much more complicated,” he added.

A Trump promise to  boost manufacturing jobs would be good for the steel industry, said Peter Warrian, a professor at the University of Toronto's Munk Institute for International Studies.

The problem, said Warren, is the lack of details into Trump’s specific plans.

“The danger is, he looks like he is making it up as he goes,” said Warren.

Among the promises made by Trump throughout the presidential campaign was the renegotiating of NAFTA.

Warrian said there probably is a formal withdrawal process for counties within to leave NAFTA, but it would be years in the making.

“How he’s going to do that? We have no idea. You can’t simply phone up Canada and Mexico and say, ‘NAFTA is over tomorrow,’” said Warren.

Wolfe said it would be difficult to pick apart NAFTA at this point.

“North American business has adapted after 20 years. There’s all kinds of American companies, including big American auto makers, who have supply chains that run through Mexico. Suddenly putting tariffs on those supply chains would be shooting yourself in both feet, as Americans,” said Wolfe.

Mayor Christian Provenzano doesn’t think the die is cast on the issue of NAFTA.

“The issue will no doubt be the subject of much discussion and debate within the US Government and amongst the NAFTA partners,” said Provenzano.

Although Provenzano says Trump’s NAFTA comments are concerning, the mayor said we will have to wait and see what the end result is.

Trump is less concerned with renegotiating trade with Canada than he is with Mexico, said Wolfe.

If NAFTA is left intact and the US government does not enact a Buy American policy, Warrian suggests the Sault Ste. Marie steel manufacturer could benefit.

“Infrastructure plays to the plate side of the steel industry, that Essar (Steel Algoma) is strong on,” said Warrian.