WCA September 2018

From the Americas

Mr Padnos : What might happen is that our local manufacturers lose orders because they have to pay so much more for their steel that their products are not competitive. An example might be somebody that makes a file cabinet. If they punch out a hole for the lock, we would get the scrap from that. If steel becomes too expensive and they import the whole cabinet from another country, we don’t get the scrap. But, more important, the people that were making the product in the USA could lose their jobs. NPR : If people in the [Trump] administration are listening to you today, what would you tell them about the tariffs? Mr Padnos : I would quote [the conservative syndicated columnist] George Will: putting in a tariff is like putting up a blockade on your own country. Historically, when you put a blockade on someone, it was considered an act of war. In a way, it’s like an act of war on ourselves. And, actually, this applies to China as well, because we provide scrap aluminium to them, and they need it. If they have to use primary aluminium ore, that uses vastly more energy and it works directly against their own environmental goals. So I would look for different solutions [ie, other than tariffs]. Another contrarian view of the Trump tariffs, from a Pennsylvania town that has armour-plated the US military for generations Tom McCarthy, the national affairs correspondent for Guardian US is familiar with the warnings of economists that steel tariffs could hurt the USA economy, raise prices and harm American workers, including steelworkers. The European Union has announced $3.3 billion in retaliatory tariffs on US imports, effective July, and Mexico and Canada have levied retaliatory penalties, raising the odds of a trade war. Mr McCarthy noted: “Even a White House economic analysis reportedly found that [US president] Trump’s tariffs would hurt US economic growth.” However, writing from Coatesville, Pennsylvania, Mr McCarthy pointed out that, for Coatesville and places like it, there are more pressing problems than the threat of a trade war. Since the decline of big steel in the 1970s and 1980s, the town of about 13,000 people has faced a flat jobs market, shrinking property values, and stagnant income levels. It sees the Trump import tariffs (25 per cent on steel, 10 per cent on aluminium) from a different perspective from other steel-oriented places. (“Portrait of a Steel Town: Where Others Fear a Trade War, Coatesville Sees Hope,” 9 th June)

Steel A report from the front lines: how the Trump tariffs on steel and aluminium are hurting one USA small business Many American products will cost more in Europe after the European Union (EU) imposes a tax in retaliation for US tariffs on imported steel and aluminium. Mexico has already applied tariffs to US goods. Canada’s counter-tariffs began on 1 st July, and by the end of that month China was to levy $34 billion worth of tariffs on products from the USA. Seeking input from a small business owner, Scott Simon of National Public Radio ( NPR ) spoke with a Midwesterner about how the US tariffs on steel and aluminium are affecting his business. Jeff Padnos helps run the family scrap and recycling firm – PADNOS, in Holland, Michigan – that was founded by his grandfather in 1905. Here, condensed and lightly edited, are highlights of the NPR interview with the chairman of PADNOS (“How A Small Business Is Handling Steel Tariffs,” 23 rd June): NPR : Will these tariffs affect you? Jeff Padnos : They already have. While other people are talking about what might happen, China quickly put a 25 per cent tax on aluminium scrap from the United States. Then, on 4 th May, they suddenly announced a complete moratorium on all scrap shipments from the USA, effective immediately. [We had] materials already on the water that couldn’t be diverted. When they got to China they were stacked up in the ports. They’ve been in limbo. We still have some material that we shipped that has not been able to clear through and get to the customer. So that’s created a lot of uncertainty. And then, effective 31 st May, [China] put on new inspection requirements. They’ve said that every load has to be inspected by one of their inspection people. And they’ve only got three offices in the whole USA, so it’s still going to create a great bottleneck for us. NPR : The intent of these tariffs is to create more business and jobs in the US, obviously. Can you replace any lost business overseas with US customers? Mr Padnos : We’re dealing in worldwide commodities, and so we do look for new places to ship, and we will. But it’s hard to make up a market like China. And we’re only talking about things that have already happened. We’re not talking about the impacts on our business of the other effects of a generalised trade war. I mean, all the things with steel are yet to be seen. NPR : And you must have to worry about that in your business. What things concern you that might happen?

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Wire & Cable ASIA – September/October 2018

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