The Trump administration’s recent authorization of tariffs on steel and aluminum has produced mixed reactions in U.S. industries. Manufacturers of these metals regard the action as defending their businesses against dumping by foreign competitors.
Heidi Brock, president and CEO of the Aluminum Association, praised the decision. She issued a statement declaring: "We look forward to working with the president on implementation and to creating a more level playing field."
The American Iron and Steel Institute (AISI) explained its support for the action. Thomas Gibson, president and CEO of AISI, claimed, "About one-fourth of domestic steel capacity today is not being utilized. This is being fueled by the massive excess steel capacity in the world today, which is more than eight times larger than the annual output of all U.S. steel producers and driven by subsidies and other interventional government policies. That translates into idled plants and the loss of thousands of jobs."
Other affected industries
Users of steel and aluminum products such as producers of soup, beer and watercraft expressed a different perspective.
Thom Dammrich, president of the National Marine Manufacturer's Association (NMMA), issued his view. "Today's decision by the administration to implement new tariffs severely harms the $37 billion U.S. recreational boating industry and the 650,000 workers it supports."
In a tweet, a beer manufacturer remarked: "Like most brewers we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise. It is likely to lead to job losses across the beer industry." Automobile dealers also expect prices to rise.
Legal issues
The U.S. Commerce Department conducted an investigation and offered its recommendations to the administration concerning the tariffs. The proposed duties, however, are higher for at least one product than the level Commerce Secretary Wilbur Ross' report advised.
Under a law passed in 1962, if this type of investigation identifies a threat to national security, congressional approval for such tariffs is not required.
The U.S. government previously took measures based on recommendations from the United States Trade Representative (USTR) to protect the solar cell and washing machine industries. The move was justified based on a sharp increase in imports of washing machines that began in 2012. Solar cells produced in the U.S. have also faced severe competition from abroad, mainly from China.
In the case of washing machines, duties are imposed above a certain threshold. For each of three years, numbers of units ranging from 50,000 to 90,000 are excluded from the tariff. The first 1.2 million imported washers are taxed at rates that decline each year from 20 to 16 percent. Taxes applied to the remaining units start at 50 percent and fall to 40 percent.
The tariffs imposed on solar cells cover four years. During this time, 2.5 gigawatts of cells are exempted. Over this span, duties start at 30 percent and fall to 15 percent in the fourth year.
Coping with price increases
With tariff-initiated rising steel and aluminum prices, some manufacturers will be forced to adjust their supplier base. This change will involve shifting from foreign suppliers to domestic ones. The alternative energy sector faced a similar situation when tariffs were imposed on solar cells and continue to grapple with the challenge.
IndustryNet is a direct path for U.S.-based steel and aluminum manufacturers to increase their visibility among industrial procurers.
Businesses seeking new suppliers of a multitude of products, including steel, aluminum and solar cells may simplify their searches by consulting IndustryNet.
This comprehensive directory maintains continually updated information on over 400,000 U. S. manufacturers and suppliers of more than 10,000 products and services.
A free online search will yield a list of firms by both capabilities and geographic area. Using this resource, customers can readily request a quote or contact vendors directly or through social media.
Related:
Complete guide to sourcing a metal fabrication company
19 steel fabrication companies leading U.S. growth
