The Trump administration will impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union starting June 1.

The decision places an immediate 25% tariff on steel and 10% tariff on aluminum from U.S. allies who had been offered temporary duty exemptions from the unilateral global tariffs since March, when President Donald Trump announced them.

The Industrial Fasteners Institute’s Washington representative Jennifer Baker Reid told GlobalFastenerNews.com that up until a couple of days ago, she remained hopeful that the Trump administration would reach agreements with Canada, Mexico and the EU that would exempt those trading partners from the metals tariffs. But negotiations faltered in recent days.

“It became pretty clear in the last 48 hours that things were not going well,” Reid told GlobalFastenerNews.com.

Now the U.S. fastener industry is bracing for the fallout from those tariffs.

“If you’re a U.S. fastener manufacturer and get your steel from Canada or Europe, you’re price goes up 25% on Friday.”

“Raw material prices and lead times were already increasing. This will make matters worse. If you don’t buy steel domestically, you buy from Canada or the EU.”

The trade conflict is not limited to imported steel.

“We are going to get some immediate retaliation effort that will have global repercussions.”

The EU, which had offered to end its 10% tariff on automotive imports in order to avoid metals tariffs, has already prepared a list of retaliatory tariffs on U.S. products.

“If you export fasteners and your HTF is on that list, you’re going to face immediate tariffs,” Reid noted.

Mexico plans to place tariffs on such U.S. goods as steel and pipe products and agricultural goods.

And Canada, which exported 90% of its total steel exports to the U.S., has promised retaliatory measures as well, according to the Wall Street Journal.

Reid said the temporary exclusions for close U.S. allies were lessening the tariffs’ effects on manufacturers.

But the May 31 announcement by Commerce Secretary Wilber Ross ended that reprieve.


Exclusion Process ‘Broken’
U.S. fastener manufacturers have been applying for product exclusions from the Commerce Department.

So far, more than 4,000 exclusions requests have been filed, though only several hundred have been made available for public comment. Once public, domestic steel manufacturers have 30 days to file an objection.

Reid said the Commerce Department was already overwhelmed by the exclusion requests, which will only increase now that the 232 tariffs apply to Canada, Mexico, and the EU.

“The process is broken, it has been overloaded, and that is only going to get worse,” Reid told GlobalFastenerNews.com.

So far, no IFI members have received exclusions, those some have applied for them.

Meanwhile, domestic steel prices will continue to rise while Commerce grapples with an exclusion process that requires companies to file a separate request for each product they want excluded from the tariffs.


Industry Advocacy Continues
For more than a year, the IFI has been trying to convince the Trump administration against implementing steel and aluminum tariffs, which ultimately were rationalized after the Commerce Department reported that steel and aluminum imports “threaten to impair the national security,” as defined by Section 232 of the Trade Expansion Act of 1962.

The IFI is part of the Coalition of American Metal Manufacturers and Users, which opposes the 232 tariffs under the slogan,“Tariffs are Taxes.”

“We are deeply disappointed that the Trump Administration has decided to move forward with imposing steel and aluminum tariffs on the EU, Canada, and Mexico, the coalition stated just after the exemptions for allied countries ended. “Make no mistake: restricting the raw material supply in the U.S. and imposing tariffs on imports from our closest trading partners places American manufacturers directly in harm’s way.” 

The last time the U.S. imposed steel tariffs in 2002, more than 200,000 manufacturing jobs were lost.  The consequences of these 232 steel tariffs could be even worse for U.S. companies as the 2002 tariffs were not applied to Canada and Mexico.

The tariffs particularly impact small and medium sized companies who will lose business to their overseas competitors. 

“Our members are also reporting concerns over their own exports as their overseas customers shift to non-U.S. suppliers who do not face government restrictions on steel and aluminum,” the coalition stated. “And when a customer removes you from their supply chain, especially for smaller, family-owned businesses, it is tough to bring that work back to the U.S.” 

Reid said the IFI will continue to work with Trump administration and Congress to talk about the impact of tariffs on its members.

“Education and advocacy are things we can continue.”

But she pointed out that unlike the 2002 tariffs, the 232 process doesn’t have a time limit, which places it totally at the President’s discretion.

“This administration is very hard to predict,” Reid stated. Web: Indfast.org