U.S. fastener manufacturers continue to receive “very inconsistent responses from the U.S. Commerce Department” related to exclusions from the 232 tariffs on steel and aluminum, according to Industrial Fasteners Institute’s Washington representative Jennifer Baker Reid.

A few IFI members applying for a waiver from the tariffs have received “information incomplete” responses from the Commerce Department, Reid told FIN.  But Reid is unaware of any IFI member that has received a waiver for steel.

“The Commerce Department continues to be overwhelmed, the process is inconsistent at best, and tilted to steel industry at worst,” Reid told FIN.

Despite the lackluster response, companies are reluctant to publicly air concerns if they are awaiting waiver decisions from the Commerce Department.

“If you’re a publicly traded company, you don’t want to be the next Harley-Davidson,” Reid stated.

Reid noted that members of Congress have begun to push back against the 232 tariffs by  introducing bills to alter the President’s authority under 232 to levy tariffs. But politics my delay those efforts.

“Concern has grown in Congress, but I think it will be very difficult to get a tariff bill passed before the midterm elections,” Reid told FIN.

Reid urged fastener companies to provide Congress “real examples of real companies in real pain,” but she acknowledged that many companies are uncomfortable making public statements.

And unlike the 201 tariffs former President George W. Bush imposed in 2002, the 232 tariffs under Trump have no specified review or sunset clause.

“My gut tells me we will need to convince the Administration to lift the tariffs,” Reid stated.

Reid said negotiations with other countries may have a more immediate effect on Trump’s 232 tariffs.

“I don’t see the EU agreeing to a trade deal that doesn’t address steel and aluminum tariffs,” Reid told FIN. “Frankly I can’t see Canada or Mexico doing that either.”

Reid said she is encouraged by Trump’s decision to delay auto tariffs with EU automakers while the countries pursue further negotiations.

But she warned that the U.S. has not fully felt the impact of the 232 tariffs. Some companies have been insulated from the impact by year-long contracts, but that’s rapidly coming to an end.

“The U.S. is an island of high steel prices right now,” Reid told FIN. “The overall healthy economy is masking the pain of these tariffs, but I don’t know how long that will stay the case.”

The issue is not limited to imported steel.

“Domestic prices have jumped,” Reid noted. “Your prices are up no matter what.”

Reid said domestic companies might still be able to get imported product with the tariff and still pay less than buying domestic.

“We may have created a situation where the U.S. government is incentivizing businesses to import products,” Reid told FIN.

But some fastener manufacturers, especially automotive and aerospace companies, can’t simply shop around; their OEMs would need to approve their suppliers. Web: IndFast.org


U.S. Steelmakers Have Strong Influence
Both Nucor Corp. and United States Steel have objected to 1,600 exemption requests filed with the Commerce Department, the New York Times reports.

“To date, their efforts have never failed, resulting in denials for companies that are based in the United States but rely on imported pipes, screws, wire and other foreign steel products for their supply chains,” writes NYT reporter Jim Tankersley.

U.S. companies have filed more than 20,000 requests for steel tariff exemptions, with 639 being denied by the the Commerce Department to date. The majority of those waiver requests await a decision.

Half of those denials came in cases where U.S. Steel, Nucor or AK Steel Holding Corp. filed an objection, a NYT analysis shows. Nearly all of the rest were in cases where the company applying for an exclusion erred in its submission.

Department officials told NYT that they have not granted a single steel exclusion request that drew an objection.


U.S. Fastener Manufacturers Respond
Sara Mallo of Rotor Clip was blunt in her assessment of the 232 tariff waiver process.

“This is a nightmare and a work in process right now,” Mallo told FIN. 

“We will Have to pass on to customers if this continues in order to remain a viable source.”

“Steel is our #1 cost driver, so this tariff has had an initial impact on our direct costs,” Mark Quebbeman of Semblex Corp. told FIN. “Lead times for alloy steel and carbon steel have had minimal effect for now but this will change if expected material allocation starts to consistently occur.”

Regarding passing costs increases on to customers, Quebbeman said: “We are working on this now with our customers and are optimistic we can develop solutions with them. Some of these solutions are already in place and some are pending.”

Quebbeman said Semblex continues to book “significant” new business.

“However, it is still early; the tariff has essentially been in place for only 60 days.”

ISSCO, INC/BTM Manufacturing president Jake Davis told FIN he’s receiving price increase notifications from prominent suppliers.

“This is certainly a very volatile time within the industry,” Davis told FIN. “I have had some tough conversations with a couple of our larger customers, as they are trying to figure our price points for their products as 2019 seems to be right around the corner. 

“At the moment, the only thing the tariffs have affected is our costs. Lead times remain stable.”

Davis said most customers are not surprised to see price increases.