Tennessee manufacturers to Trump: Rescind Section 232 steel tariffs
Manufacturers in Dickson County, Tennessee, recently sent a letter to President Donald Trump detailing their opposition to the president’s Section 232 steel tariffs. The tariffs were first imposed on steel imports in April on the grounds that the shipments pose a national security threat to the United States.
Following are excerpts from the letter:
“Today, our companies are facing a rapid increase in steel costs that threatens our ability to compete. All steel prices, whether produced domestically or imported, are the highest they have been since 2008 and 43 percent higher than this time last year. Domestic steel prices are 68 percent higher than the average world export price and 88 percent higher than steel costs in China.
“We find it difficult to pass on these cost increases either due to contractual obligations or competitive pressures. Even where we can pass on price increases, we face the clear long-term risk of losing market share to lower priced foreign competition, who do not face government-imposed import restrictions which artificially drive up steel costs. Foreign competitors have strategic material cost advantages and their manufactured products freely flow into the US with little or no tariffs.
“All of us source our steel from domestic steel mills and share your interest in maintaining a strong steel industry. Fortunately, the US steel mills are financially quite strong. In 2017, before the tariffs went into effect, the US steel industries had their best financial year since 2008. Moreover, their earnings in 2018 far exceed last year.
“Unfortunately, companies like ours that consume steel are facing significant headwinds. The 25-percent tariffs are effective in reducing the flow of raw steel crossing our boarders into the US, but result in the importation of steel components and finished goods in their stead. This not only will negatively impact our companies, but also US consumers who will be faced with higher prices. Ultimately, the domestic steel mills will feel the consequences as their customer base shrink.”