President implements steel and aluminum tariffs
On March 8, President Trump approved a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. The tariff applies to imports from all countries except Canada and Mexico, while negotiation on the North American Free Trade Agreement (NAFTA) continues. The tariffs, which administration officials say will help protect U.S. jobs, took effect March 23.
“NAFEM opposes the President’s plan. These tariffs will increase the costs of domestic and imported raw materials, putting foodservice equipment and supplies manufacturers and our employees at risk,” said NAFEM President Kevin Fink, CFSP, president of Master-Bilt/Nor-Lake, Standex Refrigeration Solutions group.
NAFEM Past President John Nackley, CFSP, president/CEO of InterMetro Industries Corporation, an Ali Group company, in Pennsylvania steel country, expressed similar concerns. “We’ve already seen significant inflation in domestic steel prices,” he said. “With softening competitive pressures on U.S. steel providers brought on by the tariffs, we expect even more aggressive pricing. Unfortunately, these higher prices may manifest in lower sales, less investment and potentially, even a loss of jobs.”
At the same time, NAFEM members also are concerned that the increased price of raw materials will make it difficult to compete with imported finished goods. “Manufacturers in other countries will have a significantly lower cost structure, making it possible to sell their goods for less in the U.S. marketplace,” said Paul Egbert, managing director of Vollrath’s smallwares and countertop equipment business. “Non-tariffed finished goods could have raw material costs of as much as 25 percent less than ours. It puts U.S. companies at a significant competitive disadvantage.”
Going up against competitive importers is a significant concern,” said Rich Packer, CFSP, president and CEO of American Metalcraft. “For many of our offerings, the cost of the aluminum is 60 to 70% of the actual cost of the product, and it’s already at five-year highs.”
As for potential retaliation from other countries, John isn’t certain. “The U.S. is such a significant worldwide consumer with sizeable trade imbalances with many countries, that I’m not sure we’ll see much retaliation.” If anywhere, he expects potential retaliation from the European countries.
NAFEM, meanwhile, is continuing its efforts to help the administration understand the potential negative impact of the tariffs on the more than one million, steel-using U.S. manufacturing jobs. “We will continue to work to end these tariffs as soon as possible and encourage the President to fulfill his commitment to protect and grow all U.S. manufacturing,” said Kevin.
To augment NAFEM’s efforts, companies like InterMetro and Vollrath are communicating their concerns directly to local, state and federal elected officials. “It’s going to take all of us to make our voices heard,” said John.
“We have to make it clear that we can’t help one group at the expense of others,” added Paul.
“We’ve significantly stepped up our conversations with elected officials,” said Rich. “They need to understand that the average NAFEM member isn’t a giant global corporation. We’re small- to medium-size business who personally know our employees, and their families, and we want to keep them working.”
Editor’s Note: Just before the tariffs were announced, NAFEM developed an advocacy toolkit to help members contact the White House and their U.S. Senators and Representatives to indicate their opposition to the tariffs. This information is a useful resource for continued outreach on this topic with your local, state and federal elected officials.