State firms report metal-imports use

A recent survey of Arkansas businesses revealed the firms’ reliance on imported metals and how much proposed U.S. duties on imported steel and aluminum could affect them.

The Arkansas District Export Council and the World Trade Center of Arkansas sent a survey to Arkansas companies on March 15, before certain trade exemptions were outlined and China responded with its own list of proposed tariffs on U.S. products.

Melvin Torres, director of Western Hemisphere trade for the World Trade Center, said the survey is a bit dated, but the responses remain relevant because “we import our steel from China,” and additional retaliatory tariffs would hurt business.

Torres co-wrote the report on survey results and released a summary to the Arkansas

Democrat-Gazette on Friday. The 93 companies responding to the questionnaire said they used imported steel or aluminum.

The main reason they gave for purchasing imported aluminum and steel, according to the survey, is a tight domestic supply. Almost half of the surveyed companies mentioned that in the comment section. About 13 percent said they “have no alternative to imports.”

Alan Ellstrand, associate dean of the Sam M. Walton College of Business at the University of Arkansas, Fayetteville, said the businesses that responded are “feeling the pinch” and foresee price increases for consumers.

Canada exports the most steel and aluminum to the United States, but most of the steel and aluminum imported to Arkansas is from Mexico or China, the report said.

Of the companies responding to the survey, 63 said they import steel or aluminum from China, 40 reported imported metal from Mexico and 29 from Canada. Several

companies also reported purchasing imported metals from Japan.

Torres was surprised by some of the responses. Imported steel makes up almost 50 percent of the tires made by the state’s manufacturers, he said.

If proposed tariffs are approved, tire-makers are going to pass the increased costs on “somehow to someone,” Torres

said.

Banks, real estate firms and farms reliant on these companies and their supply chains would also be subject to higher prices, Torres said.

Companies are bracing for rising metal prices, according to the survey. Nearly 40 percent estimated that their costs will rise, 34 percent said there will be a negative effect on business, 16 percent mentioned the possibility of layoffs, and “only 10 percent … said the tariffs will have no impact on their business.”