On a flat stretch of road on the southeast edge of Little Rock sits the sand-colored Sri Radha Madhav Welspun Temple, a place of Hindu worship by the Arkansas River. The temple’s Facebook page shows a room behind heavy brown front doors where visitors can offer prayers to a pair of small figures draped in flowers.
Now it seems as though President Trump might answer those prayers. Trump has pledged to give a green light to new oil and gas pipeline projects such as the Keystone XL — as long as they use U.S.-made steel pipelines. And down the road from the temple sits row upon row of steel pipe stacked on the grounds of Welspun Tubular, whose name is on the temple and which is a subsidiary of an Indian company that is one of only half a dozen manufacturers of large-diameter steel pipe in the United States.
“I said, ‘Who makes the pipes for the pipeline?’ ” Trump recounted Friday at the Conservative Political Action Conference in National Harbor. “ ‘Well, sir, it comes from all over the world; isn’t that wonderful?’ I said, ‘Nope, comes from the United States, or we’re not building it.’ American steel. If they want a pipeline in the United States, they’re going to use pipe that’s made in the United States.”
Yet people in the steel and pipeline industries are confused about what Trump means when he says he wants to favor U.S. steel. Raw steel and steel pipelines are different things.
Take Welspun Tubular. Is it on Trump’s good list or bad? It invested during the depths of the recession and at one point employed as many as 600 people in Little Rock. In May 2010, both Arkansas senators, then-Gov. Mike Beebe and Welspun’s top execs gathered to announce yet another investment.
But Welspun uses steel that comes largely from India, according to industry sources. Last year, with oil and gas prices sagging, it laid off more than 100 people.
Welspun did not answer phone calls on Friday.
Trump has said he wants to drive a tough bargain with Trans-Canada, the Calgary-based owner of the Keystone pipeline network. Yet TransCanada said in 2013 that it had already purchased all of the steel pipe it needed for the Keystone XL, including half from Welspun’s Arkansas plant, 24 percent from a Russian-owned plant in Canada, 16 percent from Italy and 10 percent from India.
It’s unlikely that Welspun would face much competition. It makes pipes that are 24 to 60 inches in diameter. Most other companies make only smaller steel pipes, used for drilling beneath the waters of the Gulf of Mexico or in the rich shale rock of Pennsylvania.
Industry executives said it would require major new capital investments to make new larger-diameter products. And such an investment could be a gamble if an election in four years were to change the pipeline landscape.
Still, many makers of raw steel say that Trump could come up with rules that would boost the industry, which is operating at about 72 percent of capacity. Moreover, the United States is currently a net importer of 26 percent of its steel consumption, near-record highs.
“Supporting domestic steel supports free trade, because we are the lowest-cost producer to our home market,” said Michelle Applebaum, a consultant to the steel industry and corporate board member.
Others see Trump’s vow to erect new barriers as something that will hurt global trade, and some American products. As it is, the United States levies tariffs of 20 to 40 percent on many imported steel products.
“This may save steel industry jobs, but this may cause very big harm to the steel consuming industry,” said Tadaaki Yamaguchi, the president of JFE Steel America, a Japanese company that supplies steel to its sister company in California, which turns that into small-diameter oil industry pipe. Even though the company employs roughly 1,000 U.S. workers, it may not qualify under Trump’s plan.
Yamaguchi fears that if Trump can impose limits on even private sector projects, he could do the same for other products and industries. “I am very afraid of the impact,” Yamaguchi said.
Bryan Riley, a senior analyst in trade policy at the Heritage Foundation and an advocate for free trade, agreed. “There’s certainly a risk that, if the U.S. were to restrict steel imports, then that could make it harder for companies that use steel to be competitive internationally,” he said.
And others doubt the steel industry will ever return to what it was.
“Steel is a sector that has been shedding jobs for many decades, and primarily on the back of technology, on the development of new steel furnaces, which are increasingly efficient and automated,” said Joshua Meltzer, senior fellow at the Brookings Institution.
Meltzer said of Trump’s plans: “The problem is if you start identifying particular industries that the U.S. should have more of, even though market forces have been trending in the opposite direction for decades, you’re basically saying that you want the U.S. economy to incur significant costs to bring back an industry that shouldn’t be the equivalent size as it was decades ago.”
An earlier version of this story incorrectly said Welspun Tubular was the only manufacturer of large-diameter pipes in the United States. There are actually a half dozen or so. The story has been updated.