While US steel mills applauded today’s announcement that Donald Trump plans to implement a 25 percent tariff on steel imports with an official signing next week, not all steel and steel-related sectors in the US shared their optimism about how the tariffs will affect the US economy, and the stock market showed an immediate slump.
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI), which represents manufacturers of heating, air conditioning, commercial refrigeration, and water heating products and equipment, said it is disappointed in the decision.
“As major users of steel and aluminum, we have been proactive in explaining to the administration that the HVACR and water heating industry would be negatively impacted by an increase in tariffs, as would the consumers that rely on the products we manufacture,” said AHRI President and CEO Stephen Yurek. “While we have been pleased with the Trump Administration’s enthusiastic support for manufacturing, we believe this step to be injurious, rather than helpful, to our efforts to increase American manufacturing and create jobs.”
The National Tooling and Machining Association and Precision Metalforming Association, which also represents sectors that consume significant amounts of steel, made a similar public statement.
“The steep tariffs on steel and aluminum that President Trump announced will be imposed next week imperils the US manufacturing sector, and particularly downstream US steel and aluminum consuming companies, who alone employ 6.5 million Americans compared to the 80,000 employed by the domestic steel industry,” said Roy Hardy, President of the Precision Metalforming Association, and Dave Tilstone, President of the National Tooling and Machining Association. “The tariffs will lead to the US once again becoming an island of high steel prices resulting in our customers simply importing the finished part.”
The association added that lost business to overseas competitors will threaten thousands of jobs across the United States in the steel consuming manufacturing sector, similar to their experience in 2002 when the US last imposed tariffs on steel imports. The Section 201 steel tariffs resulted in the loss of 200,000 US manufacturing jobs because of high steel prices.
Trump’s announcement is already negatively affecting the US manufacturing sector. The Dow Jones plunged 420 points following the announcement, with automakers and manufacturers getting hit the hardest.
Politicians are also concerned about retaliatory tariffs, with Republican Senators from heavily agricultural states warning about the unintended consequences of high steel tariffs in various news reports.
“Let’s be clear: The president is proposing a massive tax increase on American families,” said Senator Ben Sasse (R-Nebraska). “Protectionism is weak, not strong.”
Senator Ron Johnson (R-Wisconsin) said a more targeted approach to trade abuses was best. “I am highly concerned about the negative aspects,” he said. “There have been abuses building up over the years. We should target those abuses. I’m just not sure this is the way to do it overall with the steel and aluminum. It really will have negative and unintended consequences.”
Senator Orrin Hatch (R-Utah) said tariffs create “tariff wars,” which he doesn’t think is “the way to go.”