Local groups are mixed on Trump’s tariffs
Tariffs President Donald Trump placed on imported steel and aluminum earlier this month have brought mixed reactions from local companies and the steelworkers union.
The president signed an order March 8 imposing tariffs of 25 percent on steel imports and 10 percent on imported aluminum in a move he called “the first of many” to reduce the country’s “$800 billion trade deficit with the world.” The duties went into effect 15 days later.
Trump cast his action as necessary to protect industries “ravaged by aggressive foreign trade practices. It’s really an assault on our country.”
“When they charge 25 percent for a car to come in, and we charge 2 percent for their car to come into the United States, that’s not good,” Trump said at the signing ceremony. “… If they charge us, we charge them the same thing. That is the way it has got to be. That is not the way it is. For many, many years, for many decades, it has not been that way.”
U.S. steel and aluminum producers— their counterparts around the world—have been hammered by overproduction in China. Beijing’s explosive output has depressed global metals prices and forced U.S. domestic companies to reduce production and cut jobs.
But Cooper Tire & Rubber Co., an international company with a manufacturing plant in Texarkana, depends on an imported steel product to make its tires.
“Cooper is a member company of the U.S. Tire Manufacturers Association. The USTMA has vigorously opposed the imposition of restrictions on our industry’s ability to import the high-quality steel wire rod needed to make tires in the U.S., as this vital tire component is not produced domestically.
“Further, tariffs or quotas on these products could make the U.S. less competitive in the global manufacturing industry. We will continue to make our views on this issue known through the USTMA,” a press release from Cooper states.
David Boone, president of United Steelworkers Local 752L in Texarkana and self-described “proud steelworker,” acknowledges Cooper’s position, fearing the adverse affect it will have on steel prices used in tire production.
“They search for the best steel prices, foreign and domestic,” he said. “The tariffs may drive up overseas steel costs, affecting Cooper’s bottom line, which Cooper corporate management estimates could be as much as $15 million. … However, they have not announced any plans to layoffs and are assuming a wait-and-see posture at this time.”
USW has announced its support of the tariffs. Along with 1,500 workers at Cooper, USW Local 752L represents 25 workers at Boyd Corp.’s Solomide Foams plant in Magnolia, Ark., and 60 at Arconic Mill Products (formerly Alcoa) aluminum casthouse in Texarkana, Texas.
Boone said industry workers have fighting an uphill battle for a long time.
“I didn’t vote for President Trump, and some of his actions I have a problem with,” Boone said. “However, on this issue, I agree with him. For many years, Americans have lost thousands of jobs in aluminum and steel. The Chinese subsidize and under-price their aluminum, and it has hurt our workers.”
China increased its aluminum production between 2000 and 2015 from 3 million tons to 32 million tons annually, according to information from USW International.
“That accounts for 55 percent of current global aluminum production and 50 percent of demand,” Boone said. “Twenty-three years ago, there were 23 aluminum smelting plants in operation in the U.S. In 2011, that number had fallen to 14 operating stateside. At present, there are only five, with only two operating at full capacity.”
Boone said the restriction will give American workers the opportunity to compete with China and bring back lost jobs in the steel and aluminum industries.
“The tariffs will help set up an even playing field for American workers, who, given a fair chance, can compete with any workers anywhere in the world,” Boone said. “… We believe this helps give our workers a chance. This will help put steel and aluminum workers back to work and revive those communities.”
“President Trump made promises about putting workers back to work. I believe these are essential steps. I also hope that he does for tires what he is doing for aluminum and steel,” he said.
The tariffs’ affect on metal prices has already hit home, giving the local recycling business a boost.
“We are already feeling the effects,” said Adam Glick, president of Tri-State Iron & Metal in Texarkana, Ark., which deals in aluminum and steel recycling and reuse. “March 24 was the busiest Saturday we have had in years as far as customers bringing us scrap to sell.”
Prices have gone up 30 percent in some categories, Glick said.
“Word is getting out. Some of our old customers are starting to return,” he said.
The recycled metal industry has seen ups and downs in recent years.
“We were enjoying a boom in the scrap-metal market in (2011-14),” he said, “But in (2015), the market crashed. Our customers, used to high scrap-buying prices for years, were caught off guard. This reduced recycling efforts in 2015-17. But now, it is back up.” Tri-State officials are watching and waiting. “Our concern is for the conditions being undone or the effects if a trade war kicks off,” he said. “China has announced tariffs of its own with a 30-day commentary period. This is something that affects lots of people, but some of it has been unnecessarily drummed up.”
The action was taken in the name of national defense, as the administration said the steel and aluminum industries are vital such.
“We’re doing things for this country that should’ve been done for many, many years,” the president said at the signing ceremony. “We’ve had this abuse by many other countries … and we don’t want that to happen. We’re not going to let that happen.”
“It’s going to make us a much stronger, much richer nation,” Trump said.
Canada and Mexico were exempted pending negotiation of changes to the North American Free Trade Agreement, Trump said.