Gains eclipsed by losses

While Donald Trump’s Section 232 tariffs were good for major US steelmakers, the story further downstream has been less than satisfactory with forecasts of fewer manufacturing jobs and some companies considering exiting the states States for countries where steel is cheaper.

A ‘high steel price island’ is how members of the Coalition of American Metal Manufacturers and Users (CAMMU) describe the outcome of the Section 232 tariffs, imposed in 2018 by the US President of the time, Donald Trump.

Testifying before the United States International Trade Commission (USITC), CAMMU members and other domestic manufacturers spoke of shipping delays, supply shortages and loss of business to competitors strangers.

The hearing was part of a USITC investigation, directed by Congress, to study the impact of controversial Trump-era tariffs (including Section 301 tariffs) on “trade, production and prices in the industries most affected by these tariffs”.

CAMMU is by no means small fry. It describes itself as “a broad organization of American manufacturers and associations representing more than 30,000 companies and more than one million American manufacturing workers.”

Executive Director Paul Nathanson testified that a survey of over 70 CAMMU member companies, conducted over the past fortnight, found that 84% of respondents had difficulty sourcing steel and 87% of respondents were experiencing delays in receiving steel supplies. The survey found that 35% of respondents said they experienced supply delays of more than two months and 32% reported delays of more than three months.

We need stability and certainty in our industry and section 232 national security tariffs on our allies and now some tariff rate quotas are creating more instability not less even if you don’t import a lot of steel .”

Stuart Speyer, president of Tennsco LLC.

According to Stuart Speyer, president of Tennsco LLC, certainty and stability are needed and the recently introduced Section 232 tariffs and tariff rate quotas are creating more instability. “In my opinion, when Section 232 tariffs were implemented, they were a solution in search of a problem…Any gain perceived by the steel industry through tariffs has been eclipsed by the losses of the companies downstream,” Speyer said.

Scott Buehrer, president of B Walter & Company, Wabash, Indiana, said the longer steel tariffs remain, the weaker the long-term demand for U.S.-made steel will be. This, he said, would lead to fewer manufacturing jobs among domestic steel users and domestic steel producers.

A number of US-based trade associations also expressed their views, with comments from the Precision Metalforming Association, Industrial Fasteners Institute, and Precision Machined Products Association.

“What matters most to American manufacturers is the price difference between what they pay for steel and what their global competitors pay.”

David Klotz, President, Precision Metalforming Association.

David Klotz, president of the Precision Metalforming Association, testified that Section 232 tariffs put U.S. manufacturers at a significant disadvantage, while Dan Walker, CEO of the Industrial Fasteners Institute, said the combination of high steel and very long delivery times has resulted in its members losing long-standing customers to foreign competitors, mainly in Korea and Taiwan.

Miles Free, director of industrial affairs at the Precision Machined Products Association, speaking on supply chain issues, said, “Without availability, we can’t make parts, plain and simple.”

“If the purpose of the Section 232 tariffs was to dramatically increase the supply of steel and aluminum to the United States, they have failed to achieve that goal.”

Miles Free, Director of Industrial Affairs, Precision Machined Products Association.

David Klotz of the Precision Metalforming Association sounded a note of desperation when he testified that if the situation is not resolved, some manufacturers may leave the United States for other countries where steel is cheaper – and convert foreign-made steel into products. to be returned to the United States duty-free. “Because the domestic steel industry exports very little steel, when these manufacturers close or move overseas, the domestic industry will also suffer,” he said.

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