President Trump boasts that his trade policies are bringing back the steel industry, but recent corporate earnings reports make clear that they're also hurting the bottom line at many manufacturing companies.
"We're putting our steel workers back to work at clips that nobody would believe, right?" Trump asked the crowd at an Aug. 1 rally in Pennsylvania.
Major American steelmakers have reported higher-than-expected revenue in the second-quarter, thanks in part to Trump's 25 percent tariffs on imported steel.
Nucor, the largest US steel company, said in July that its second-quarter earnings more than doubled, partly because of higher steel prices.
U.S. Steel has embarked on several large capital projects and has recently reopened two blast furnaces at a facility in Granite City, Illinois, a plant that Trump visited on July 26.
"The commitment he has to steel is unprecedented," U.S. Steel CEO David Burritt said during an Aug. 2 conference call with Wall Street analysts.
"You have to be able to make steel if you want to have a strong country," he added. "We don't expect the president to blink."
Still, the number of manufacturers that produce steel is dwarfed by the number that consume it, and many companies have complained they're facing higher prices because of the Trump administration's tariffs on steel and aluminum. They include major names such as General Motors, 3M, Stanley Black and Decker, and Caterpillar.
The higher prices aren't a huge problem at a time when the economy is faring well, says Scott Paul, president of the Alliance for American Manufacturing, which supports the tariffs.
"I've seen expressions of concern about the tariffs, but the data still indicates that the economy is strong, that manufacturing is strong," Paul says.
Still, the tariffs add a big note of uncertainty to the companies' bottom lines.
"Global steel costs have risen substantially and, particularly in the U.S., they have reached unexplainable levels," Whirlpool CEO Marc Bitzer said during a recent analyst call. "Uncertainty related to tariffs and global trade actions" is pushing up costs, he added.
Ironically, among the companies warning about uncertainty are producers of aluminum, even though the Trump administration has also slapped 10 percent tariffs on imports of the metal.
That's because aluminum giants such as Alcoa tend to have a more global focus than steel, churning out more products overseas that are subject to the tariffs when they're brought back to U.S. shores.
Hundreds of companies have asked to be exempted from the steel and aluminum tariffs, but their requests have often been rejected, according to a recent New York Times report.
"The tariffs are working exactly the way we would expect them to. They're going to produce winners and losers," says Mary Lovely, a professor of economics at Syracuse University.
Tariffs make imported steel more expensive, which means domestic producers don't have to worry as much about price competition and can increase what they charge customers. That could lead them to hire more workers and invest in new production, Lovely adds.
The outlook is different for companies that must buy steel, she says.
"The companies that use steel, like aluminum can manufacturers, or companies that make steel vats for pharmaceuticals or the dairy industry, they're going to be hurt by this," Lovely says. Higher costs will force some of them to raise prices, hurting their sales, she notes.
The tariffs' impact can be especially hard on small manufacturers,
Mid Continent Nail Corp. in Poplar Bluff, Missouri, has closed a multimillion-dollar plant and is "on the brink of extinction," because of the tariffs, a spokesman has said.
At Staber Industries, an Ohio company that makes washing machines and other appliances, business has been especially good since Trump's election, with plenty of new orders from customers, says the company's president, William Staber.
But steel and aluminum prices are rising so fast that planning becomes very difficult, he says.
"You go get a quote today, it's good through the end of business today, period," he says.
Staber points out that much of what his company buys are specialty metals that aren't made in the United States, giving him no choice but to import them.
"It's all about protecting jobs and saving jobs. OK, I get that," he says. "But we're not even making it here. So whose job are you saving when you're not doing it here?"
Paul says he has heard from manufacturers complaining about the rising costs of aluminum and steel.
"I think what's on their minds is, how long are the tariffs going to last? They're looking for some certainty as they move ahead and are making investment and hiring decisions," Paul says.
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