Business leaders from nearly every American industry are furious with President Trump right now.
They’ve been pressuring his administration to back off from its plan to add steep tariffs on imported steel and aluminum, which are used to make everything from cars to boats and even soup cans.
But the president has waved off their concerns. On Thursday afternoon, Trump is expected to sign an order directing the Commerce Department to add the 25 percent levy on steel and the 10 percent levy on aluminum. He did say, however, that his administration will exempt Canada and Mexico from the tariffs for a while.
The US steel industry is quite happy about the tariffs.
Almost everyone else is upset.
That's because so many American industries need steel and aluminum: They’re used to build cars, skyscrapers, roads, bridges, washing machines, refrigerators, and a whole host of other products. More expensive steel and aluminum means higher costs for the American businesses that make these products — higher costs that will likely get passed on to consumers. And it makes business leaders nervous about the likelihood that Trump will start adding tariffs on other imports.
US Commerce Secretary Wilbur Ross has dismissed concerns about the tariffs’ potential impact on American consumers, calling it “trivial.”
“There’s about one ton of steel in a car,” Ross said on CNN. “The price of a ton of steel is $700 or so, so 25 percent on that would be one half of 1 percent price increase on the typical $35,000 car. So it’s no big deal.”
And Trump himself seems quite eager to engage in trade wars:
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
Here are some of the influential US business groups and industry leaders that have come out against the steel and aluminum tariffs:
Construction and architecture firms: “These tariffs will translate into higher costs for consumers and U.S. businesses that use these products, including home builders,” Randy Noel, chairman of the National Association of Home Builders, said in a statement. “Given that home builders are already grappling with 20 percent tariffs on Canadian softwood lumber and that the price of lumber and other key building materials are near record highs, this announcement by the president could not have come at a worse time. Tariffs hurt consumers and harm housing affordability.”
”The Administration’s announcement of new tariffs on steel and aluminum imports threatens to drastically increase the prices of many building materials specified by architects,” Carl Elefante, president of the American Institute of Architects, said in a statement. “As creative problem solvers, architects rely on a variety of these materials to achieve functional and performance goals for their clients. Inflating the cost of materials will limit the range of options they can use while adhering to budgetary constraints for a building.”
US car dealers: “These proposed tariffs on steel and aluminum imports couldn’t come at a worse time,” Cody Lusk, president of the American International Automobile Dealers Association, said in a statement. “Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America. The burden of these tariffs, as always, will be passed on to the American consumer."
Auto manufacturers: “We are concerned with the unintended consequences the proposals would have, particularly that it will lead to higher prices for steel and aluminum here in the United States, compared to the price paid by our global competitors," Matt Blunt, president of the American Automotive Policy Council, said in a statement. “This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage.”
“The President’s pending decision on tariffs and quotas for steel and aluminum trade highlights several unfortunate ironies,” John Bozzella, president of the Association of Global Automakers, said in a statement. “With one stroke of the pen, much of the promised benefit of tax reform and other Administration initiatives aimed at reviving manufacturing and protecting national security could be undercut.”
Boat manufacturers: “The implementation of these aluminum tariffs ... will drive up the costs of the aluminum used to manufacture more than 111,000 aluminum boats, such as pontoons and fishing boats, which make up 43 percent of new powerboat sales each year," Thom Dammrich, president of the National Marine Manufacturers Association, said in a statement. "Further harming the industry, the aluminum sheet our members are forced to source overseas will likely continue to be in short supply in the U.S., destroying our members’ ability to build boats in the U.S. As a result, the jobs of the American workers who build these boats, their engines and components, are now in jeopardy.”
The beer industry: "About 2 million jobs depend on America’s beer industry. We urge the Department of Commerce and U.S. President Trump to consider the impact of trade restriction tariffs,” Felipe Dutra, Anheuser-Busch InBev’s chief financial officer, said on a call with analysts.
Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise. It is likely to lead to job losses across the beer industry. (2/3)— MillerCoors (@MillerCoors) March 1, 2018
Retailers: “Make no mistake, this is a tax on American families," Matthew Shay, president of the National Retail Federation, said in a statement. "When costs of raw materials like steel and aluminum are artificially driven up, all Americans ultimately foot the bill in the form of higher prices for everything from canned goods to electronics and automobiles. The reality is that there is nothing this country will gain from such a one-sided policy. These tariffs threaten to destroy more US jobs than they will create while sending an alarming signal to our trading partners and diminishing markets for American-made products overseas.”
Machinery manufacturers: Caterpillar’s director of investor relations, Amy Campbell, told Reuters that the tariffs would pose a “challenge” and would put Caterpillar at a competitive disadvantage with foreign competitors.
US business groups: “The U.S. Chamber is very concerned about the increasing prospects of a trade war, which would put at risk the economic momentum achieved through the administration’s tax and regulatory reforms,” Thomas Donohue, CEO of the US Chamber of Commerce, said in a statement. “We urge the administration to take this risk seriously and specifically to refrain from imposing new worldwide tariffs on steel and aluminum. These new tariffs would directly harm American manufacturers, provoke widespread retaliation from our trading partners, and leave virtually untouched the true problem of Chinese steel and aluminum overcapacity.”
“Business Roundtable strongly disagrees with today’s announcement because it will hurt the U.S. economy and American companies, workers and consumers by raising prices and resulting in foreign retaliation against U.S. exporters," Joshua Bolten, president of the influential Business Roundtable, said in a statement. “Using ‘national security’ tools to implement tariffs could embolden other countries to impose ‘national security’ tariffs on U.S. exporters or otherwise restrict U.S. goods and services sold to their markets.”
But not everyone disapproves
There are a handful of winners from the proposed tariffs: the companies that produce steel and aluminum in the United States.
The CEOs of the big American steel companies were invited to the White House for Trump's big announcement. David Burritt, the CEO of US Steel, was thrilled. "This is vital to the interests of the United States," he said at the White House after the announcement, according to a pool report. "This is our moment, and it’s really important that we get this right."
US Steel’s stock prices skyrocketed in the hours following the March 1 announcement, though they have since fallen back to previous levels.