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US metal manufacturers mobilize against Trump tariffs
WASHINGTON, July 1, 2018 (BSS/AFP) – Feeling the pinch from President
Donald Trump’s protectionist trade policies, the American metal industry has
rallied its forces to plead for changes.
Employees from the Texas steel pipe producer Borusan Mannesmann Pipe sent
some 4,500 post cards to Trump and members of Congress, on behalf of their
employer in the Houston suburb of Baytown — which imports unfinished pipes
from Turkey.
Trump in March slapped duties of 25 on steel imports and 10 percent on
aluminum, and at the start of June removed temporary exemptions for major
producers Canada, Mexico and the European Union.
While Trump says the border taxes protect US national security and have
breathed life into time-ravaged American producers, about 21,000 businesses
have sought exemptions from the tariffs for foreign-made goods, arguing that
the duties threaten their import-dependent bottom lines.
But three months after the first requests, the government has reviewed only
98, Commerce Secretary Wilbur Ross said in recent congressional testimony. Of
these, just 42 were approved.
BMP CEO Joel Johnson was among the very first business leaders to seek
product exemptions for the Houston pipe company. But when he got no response,
he decided to make his case directly, along with thousands of others.
“We made an offer to President Trump and Secretary Ross which was very
simple,” he told AFP.
“We did a request for a two-year exemption of the tariffs to allow us to
build a new factory in Baytown and at the end of these two years we will stop
importing and we will be 100 percent US-made pipe.”
The proposition should appeal to Trump, given his “America first” agenda,
said Johnson, adding that it would bring his workforce to 437 people from
267.
In Baytown, unemployment is two and a half times the national average at 10
percent, and Johnson warned the company will be forced to lay workers off if
it faces an annual hit of $25 million to $35 million from the tariffs.
Republican Texas lawmaker Brian Babin made the same case to Ross last week.
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– Taking Trump to court –
Others are opting to play hardball.
The American Institute for International Steel, an industry body
representing companies that depend on steel imports, sued the Trump
administration last week before the US Court of International Trade in New
York, challenging the legality of the steel tariffs.
The organization is calling on the courts to strike down the 1962 legal
provision Trump used to impose the new duties, claiming it is
unconstitutional.
Sometimes called the “national security clause,” Section 232 of the Trade
Expansion Act of 1962 gives the US president extraordinary powers over
foreign trade, a power the US Constitution generally confers on Congress.
“Section 232 allows the president to consider virtually any effect on the
US economy as part of ‘national security,'” AIIS President Richard Chriss
said in a statement.
The federation says many American business are suffering under the tariffs
while ports and workers have seen a sharp decline in their businesses’
throughput.
So far, the Federal Reserve system’s regional manufacturing indices show
general manufacturing activity remains quite healthy by historical standards.
But steel prices have risen sharply and fast. In October, a ton of hot-
rolled steel coil went for $577, its lowest level in a year, Johnson said.
As of Friday, it was closing in on twice that at just under $917.
As the metal tariffs battle rages, a second set of Trump tariffs on Chinese
goods is due to take effect July 6, while US businesses are being hit with
retaliatory tariffs from Canada, Mexico, the EU and China.
The Trump administration also announced in late May it was considering
using Section 232 to slap duties on the hundreds of billions in autos
imported annually, a prospect economists say would make America’s trade wars
far more serious.
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