Tariffs putting crimp in shutter business
Industry proving standout example of impact of trade wars.
Halfway through hurricane season, a tony Frenchman’s Creek home in Palm Beach Gardens finally got its $40,000 in aluminum hurricane shutters Wednesday — a hard-fought-for prize in the new age of tariffs.
Ordered in April, the nearly four-month wait is more than quadruple the norm as aluminum prices edge up and supply dwindles with more mills looking to avoid tariffs by buying American, said Andy Kobosko Jr., owner of Guardian Storm Protection in suburban West Palm Beach.
Kobosko, whose company filled the Frenchman’s Creek order, said he has recently reduced delays to four to six weeks by buying in bulk with his Fort Lauderdale-based distributor. A normal wait time for shutters before the tariffs was two to three weeks, Kobosko said.
“Things are starting to catch up, but it’s been a stressful three months,” he said.
Since President Donald Trump’s March announcement of 25 percent tariffs on imported steel and 10 percent on imported aluminum, industries reliant on the metals have faced an uncertain future.
An overabundance of steel, partly because of tepid demand and increased production in China, has caused a collapse in steel prices. But aluminum is a different story with companies such as Kobosko’s scrambling to get the quantity it needs to fulfill orders.
The hurricane shutter industry, a niche market in storm-prone
states, is a standout example of the early impacts of aluminum tariffs. While a hike in metal prices can more easily disappear in the price of a car with its thousands of moving parts, there’s no disguising a cost increase on a simple sheet of metal that’s 95 percent aluminum.
“The impacts haven’t really started to sink in yet, I don’t think,” said Peter A. Quinter, chairman of the Customs and International Trade Law Group, and an attorney with the Miamibased firm Gray Robinson. “The shutters are like the canary in the coal mine.”
Prices on everything from beer to Bentleys could increase, said Quinter, who is representing a Palm Beach County aquarium company hoping to get an exemption from tariffs on fish tank air filters imported from China.
On Monday, Trump announced another 10 percent tariff on $200 billion worth of Chinese goods that will increase to 25 percent at the end of the year.
“If you drink beer, if you drive a car, if you buy clothes, it will affect everyone,” Quinter said of the tariffs. “Trade wars are a loselose scenario.”
For Megan Stojack, who rents a home in West Palm Beach, it means fretting through hurricane season without shutters after she was told in early May by several companies she couldn’t get them until after the season ends Nov. 30.
“One company referred me to American-made hurricane-grade impact windows and doors, which is incredibly expensive and not my decision to make as a tenant,” she said.
Tourism should help cushion costs
Kobosko, whose company manufactures the shutters rather than installing premade, said much of his aluminum was coming from a mill that purchases from Russia. Now he’s getting supply from multiple mills and in larger containers.
For current contracts, he’s eating the price increases of 15 to 25 percent. But new customers likely will pay more.
“It’s not just the price that’s gone up 25 percent in the past six months. The availability is down and we were only getting a fraction of our orders,” Kobosko said. “We don’t always know what we’re getting because it’s hard to keep up with demand.”
Florida’s direct aluminum and steel imports make up about 1.6 percent of its total imports, according to a March analysis by the nonprofit Brookings Institution.
That’s compared to states such as Missouri, Louisiana, Connecticut and Maryland, where aluminum and steel make up more than 5 percent of their total imports.
The Aluminum Association, a national trade association, advocates that market-based countries, such as Canada and the European Union nations, be exempt from tariffs and not subject to quotas.
“We do produce aluminum in the U.S. and we would like to produce more of it,” said Matt Meenan, senior director of public affairs for the association. “Trade action should focus on the source of the problem, and that is illegally subsidized Chinese aluminum overcapacity.”
It is unknown how the tariffs will affect spending long-term in Florida, but Michael Snipes, an economics instructor at the University of South Florida, Sarasota-Manatee, said he believes the state’s unique tourism-heavy economy will cushion some of the impacts.
“As long as people keep visiting Disney World, going to Fort Lauderdale for spring break and we have old people moving to Naples, we’ll be OK,” he said. “But places like Iowa or Minnesota — the real world — they are going to be affected because their economy is a lot more normal.”
Will prices level off ?
Snipes said the idea of imposing tariffs is to make foreign products less attractive to consumers and push buying from American companies so that, for example, the steel and aluminum industries in the U.S. are bolstered.
“A year ago, Commerce Secretary Wilbur Ross was on TV holding up cans of soup saying tariffs would increase soup by 5 cents,” Snipes said. “But soup doesn’t use a whole lot of aluminum. Bump it up to a car, then it might translate to a $500 increase.”
The U.S. Chamber of Commerce has opposed tariffs on the assumption they will spark a global trade war of retaliatory tariffs.
In Florida, the chamber estimates that more than $1 billion of annual exports including boats, manicure and pedicure preparations, cheese and copper waste could be threatened by new tariffs from Canada, China, Mexico and the European Union.
“This is the wrong approach, and it threatens to derail our nation’s recent economic resurgence,” the chamber says on its website.
Kobosko is more optimistic. He said he hasn’t lost much business because he doesn’t take deposits and customers are understanding that the tariffs have caused some upheaval in the shutter business.
He believes the U.S. will step up and produce more. Maybe prices won’t be as cheap as they were before, but he thinks they will begin to level out.
Shutters for the average three-bedroom, two-bathroom house cost between $6,000 and $8,000, Kobosko estimated.
“I don’t think it’s a bad thing long-term,” he said of the metal tariffs. “We’re in a transition period now.”