Trump tariffs would harm small business

Steel worker welding a plate
President Donald Trump recently announced tariffs on imported steel and aluminum, and business representatives say the move could harm their profit margins. Photo: Kgequipment

Following President Donald Trump’s announcement of new tariffs on aluminum and steel imports, U.S. lawmakers and business stakeholders are saying that the levies would have unintended consequences that would harm small businesses and consumers.

On Mar. 1, Trump announced that his administration will be imposing 25 and 10 percent tariffs on steel and aluminum imports, respectively, starting Mar. 23.

During the announcement, Trump said: “You are going to see expansions of a lot of the companies…if we give you that level playing field. You are going to hire up more workers and your workers are going to be very happy.”

Trump added that the U.S. will need great aluminum makers for national defense.

He then addressed business leaders in those sectors: “…You will have protection for the first time in a long while, and you’re going to regrow your industries.”

Yet this will not be the case for smaller businesses, Kevin Duthie, Chief Operating Officer for Seattle-based Standard Steel Fabricating Co, told Lens. The business deals with custom fabricated steel and buys raw product from supply houses and mills.

Duthie’s take is that the tariffs will drive up local material prices and affect the availability of the company’s products.

“The tariffs will cut down the amount of imports…available which is traditionally cheaper and is giving the mills a good chance to drive up the price.”

Duthie said the company has already made changes on its bid proposals in response to the rising prices. He added that he will now have to work to make sure the business’ price margins aren’t eaten up.

“Without exempting certain countries from this tariff, it will hurt small local businesses. It won’t hurt the big mills or the steel guys across the state because they are juicing up our prices.”

Duthie said his company won’t be able to get more domestic product because production is already capped. Down the line, companies might run into material shortages and the price of construction may rise exponentially, he added.

“Everybody who touches steel will be directly influenced by this whether they know it or not.”

In Trumps’ proclamation, he cited a concern with the size of aluminum imports posing a potential national threat. One week later, he clarified that Mexico and Canada would be exempt from the tariffs, as well as other countries who apply for relief.

In response to the news, U.S. Rep Dan Newhouse of Washington (R-4) joined 106 Republican colleagues in writing a letter to Trump, highlighting their concerns that the tariffs would have unforeseen consequences on consumers and business owners.

“Trade supports jobs in Central Washington, and 40 percent of jobs in our state are tied to international trade,” said Newhouse. “Tariffs are essentially taxes on trade that are passed on to American businesses and consumers, resulting in higher prices.”

The letter’s signers urged Trump to consider several strategies to address any concerns brought by the tariffs. One suggests allowing U.S. companies to petition for duty-free access to imports if national sources are unable to provide them. Another would ask for the grandfathering-in of existing contracts for purchasing steel or aluminum to minimize negative effects on projects currently in progress.

Newhouse cited Washington State Department of Agriculture (WSDA) statistics which show that the state produced and exported $7 billion worth of food and agricultural goods in 2016. This made Washington the third largest exporter of those products in the U.S.

“The success of our state and region’s economy is tied to effective trade relationships with reliable partners who purchase our goods,” said Newhouse. “I support targeting unfair trade practices of bad actors, but setting off a back and forth through broad, global tariffs can have unintended consequences that are harmful for economies like Central Washington’s.”

He added that he wants to work with the Trump Administration to protect Washington’s economy and its jobs that are reliant on trade.

 

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