Tennessee manufacturers urge Trump to rescind steel tariffs

A group of Dickson County manufacturers sent a letter to President Donald Trump urging him to rescind the tariffs on imported steel, which they say have impaired their ability to compete with foreign companies. 

Executives from six area companies employing more than 1,000 Tennesseans described the significant price increases on steel, both domestic and imported, that they said are impairing their ability to compete against foreign companies. According to the Aug. 13 letter, steel prices are the highest they have been since 2008 and they have increased by 43 percent since this time last year.

"These employees and our businesses depend on access to competitively priced steel to fabricate our products and compete in a global marketplace," the leaders wrote. "We cannot compete globally when the cost of our most important input has spiked and delivery times are extended."

Trump imposed 25 percent tariffs on imported steel from China, Russia, Japan and Turkey in March and more recently announced similar tariffs on steel from European countries, Canada and Mexico.   

Executives from A-1 Signs, Nashville Wire Products, Onward Manufacturing Co., Stinson Steel, Tennsco and Truform Manufacturing each signed the letter to Trump. 

The Middle Tennessee executives said passing off the higher costs to consumers is difficult because of existing contracts, but also because they risk losing market share. While the tariffs are helping to reduce steel imports, they are boosting imports of steel-made goods, which could end up hurting the steel manufacturers they are designed to protect, they wrote. 

"This not only will negatively impact our companies, but also U.S. consumers who will be faced with higher prices," the executives wrote. "Ultimately, the domestic steel mills will feel the consequences as their customer base shrink."

Stuart Speyer, president of Tennsco, said steel costs have gone up as much as 140 percent in the last two years. For the Dickson-based office cabinet maker that employs 700 people, steel comprises more than half of the company's costs on some products. As a result, he has raised his prices for his customers. 

"We can't absorb significant price increases," he said. "We don't have those kind of margins."

Some customers have been more receptive than others, but because they are also in competitive markets, they are likely to explore other options. U.S.-made steel is 68 percent higher than average world export prices and 88 percent higher than steel made in China, according to the executives' letter to Trump.

"There are foreign products that are easily available that they can switch to whenever they want," Speyer said. 

Speyer said it is still too early to determine how the tariffs might affect his workers, but over time, if he cannot retain customers, he will have to reduce his workforce.  

"If you are not competitive, you are going to lose business," he said. "Ultimately, as we  lose business we will have to reduce our employment. We haven't seen the immediate effect, but it will come."

Reach Jamie McGee at 615-259-8071 and on Twitter @JamieMcGee_.

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