The Coalition of American Metal Manufacturers and Users (CAMMU) has evaluated the current US administration’s decision to impose 25 percent tariffs on all steel and aluminum imports.
Accordingly, CAMMU stated that reintroduction of the tariffs without an exclusion or exemption puts domestic manufacturers directly at risk. Due to the Section 232 tariffs, over the past six years steel and aluminum prices have risen even for manufacturers procuring from the domestic market, the coalition underlined. Moreover, lead times for these materials have increased as well. Therefore, CAMMU pointed out, US manufacturers have to pay premiums for steel and aluminum compared to their global competitors, weakening their competitiveness. When it comes to small and medium-sized businesses, they are obviously more vulnerable compared to their global competitors since the latter have unlimited access to these inputs, resulting in the former losing their contracts with their customers to other rivals. In the meantime, downstream suppliers are unable to choose where to procure their inputs because of the OEMs, who also often determine the prices for these inputs. Apart from manufacturing, the tariffs will also have an impact on other sectors since key trading partners will also respond with countermeasures. CAMMU concluded that expansions will be stalled, and companies will struggle to make a decision regarding technology investments, workforce retention and long-term growth.
Meanwhile, Jim Farley, CEO of US automaker Ford Motor Company, warned that, if the tariffs on Mexico and Canada are implemented and remain in effect in the long term, it would have a devastating effect on the domestic automotive industry and on automotive customers because of rising costs, with Asian and European customers gaining the upper hand, according to media reports. Ford has production sites in Mexico and Canada. Mr. Farley added that, even though the majority of Ford’s steel and aluminum requirements are met by the domestic market, there are suppliers of the company that source materials from overseas, which could have an impact on costs. Additionally, he underlined that, even though President Trump is trying to make the domestic industry stronger and to bring more production to the US, all he has achieved so far is chaos and a lot of costs for the industry.