The United States buy more steel from Canada than from any other country, and those imports will become much more expensive at the tariffs that President Trump aims to impose this week.
This is good news for Stephen Capone, president of the Capone Iron Corporation of Rowley, Mass., Which makes steel stairs, handrails, particles and other products and has about 100 employees. For a long time, he said, Canadian competitors have flooded the New England market with cheap steel products, preventing its companies and other local enterprises from earning business.
“No matter how low we offer, they can subjugate us for any job,” Mr. Capone. “They are defining our market.”
Many companies oppose Mr. Trump’s tariffs for fear that they will push costs and provoke revenge against their products from other countries. Ford Motor Chief Jim Farley said last month that tariffs could “blow a hole” in the US industry in the US, and retailers have warned that they will lead to higher prices for consumers.
But there are deep pockets of support for his trade policies in the business world, especially among executives who say their industries have been damaged by unjust trade.
In particular, leaders of US Steel and Aluminum companies have long claimed that foreign rivals underestimate them because they rivals benefit from subsidies and other government support. And they say that tariffs, when set without gaps, have been effective in promoting more investment in the United States.
Mr. Trump on Thursday suspended the broad tariffs he had imposed two days ago on imports from Canada and Mexico. But tariffs on steel and aluminum products, authorized under a national security provision called Section 232 of the Law on Trade Expansion, are planned to enter into force Wednesday.
“President Trump was elected with an extraordinary mandate to level the playing field for American manufacturers and workers using tariffs, and he is committed to handing out that mandate – including for our Keystone and Aluminum industry,” said who a White House spokesman in a statement.
Fees apply a 25 percent tax on steel and aluminum imports from Canada, Mexico and other countries.
In his first administration, Mr. Trump lered Article 232 tariffs on steel and aluminum, but Mexico and Canada gained exceptions when a new trade agreement between those countries and the United States came into force in 2020.
Jesse Gary, chief executive of Century Aluminum, an American aluminum manufacturer, supported aluminum tariffs during Mr. Trump’s first term, but said the exceptions had made them less effective, and was happy to see them re -imposed.
“The new tariffs will close those reserve gaps and enable us to start investing again, and bring more production here to the US,” he said.
Philip Bell, the president of the Stelelliku Association of Producers, a US commercial group, said there had been an increase in steel imports in recent years. He said Mexican companies were importing free steel from China, making slight changes and exporting it to the United States as if they were produced in Mexico.
The Biden administration moved last year to stop the practice by applying a 25 percent fee to the Mexican steel that melted or poured out of North America before it turned into a finished product. Mr Trump’s fees go further by applying all steel from Mexico.
“The President is sending a clear message to our trading partners that it is time to become serious about their trade relations with the United States,” Mr. Bell.
Canadian steel companies reject allegations that they are violating trade rules.
“Our members are deeply engaged in a North American steel market protected by unjust trade practices, and we do not contribute to global overload with our levels of production that remain at the demand of Canada’s steel,” said Catherine Cobden, President of the Canadian Association of Stelelik, a trade group.
While tariffs can enable American steel and aluminum manufacturers to get a large portion of the domestic market, the question is whether they make the large investments needed to expand capacity.
Steel companies did so after Trump’s first administration tariffs. Timna Tanners, a managing director at Wolfe Research covering metal companies, said US companies can add enough capacities to replace imported steel in many markets. But, she added, the fear of creating a glut can endure their plans.
“The mills do not seem to want to run so much because they also think they can pressure the lowest prices, and they will better enjoy higher prices,” Ms. Tanners said.
Last year, finished steel imports made up about 23 percent of the market, according to the American Institute of Iron and Stoelelik. The United States is much more dependent on aluminum imports.
American smelters once to dominate the production of primary aluminum – aluminum derived from raw materials than from recycling – but today China does much more than any other country. The Department of Trade revealed that the United States imported 90 percent of its primary aluminum in 2016.
The Institute of Economic Policy, a left -wing opinion, credited section 232 Mr. Trump’s first administration fees for the somewhat revival of Aluminum’s main industry.
Century, the largest priority aluminum manufacturer in the United States, plans to build a new aluminum melting plant, the first in the United States in 45 years. It aims to do so with a grant of up to $ 500 million given by the Biden administration using funds from the inflation reduction and infrastructure investment act. Century must still receive significant additional funding to build the factory. And the Trump administration is considering grants made under the law on inflation reduction.
Asked if the review puts the plans at risk, Mr. Gary said, “We think the new project completely fits exactly the type of investment this administration wants to make,” adding that plant construction can create 5,500 jobs and that operation would require 1,000 full -time workers.
However, the American aluminum industry is divided into Mr. Trump’s latest tariffs, for the most part because US companies have plants in Canada that would be hit by taxes. Charles Johnson, the president of the Aluminum Association, a trade group, told LinkedIn last month that while he supported some aspects of section 232 fees, the United States needed “a reliable source of metal from Canada to support the work and investments that happen today”.
If tariffs rise steel and aluminum prices, companies using metals in their products can exceed additional costs for consumers – or find substitutes.
Trade unions also support Mr. Trump’s tariffs but have sometimes opposed how he has imposed them. The united union of steel workers has criticized its targeting of Canada, with over 225,000 members, saying that the steel trade with Canada is right.
“We call on the president, moving forward, to distinguish between trade fraudsters and trusted allies who work with us to advance our national and economic security,” said David McCall, an international president of the United Staff in a statement.
Mr. Capone, the executive of Massachusetts Steel, wants Mr. Trump’s steel tariffs to be even tougher. They exclude steel imports from Canada from tariffs if the Canadian company is fabricating steel made on US mills. He said much more work was involved in steel fabrication – turning it into products such as stairs and gravity – rather than in its production, and said it should be reflected in tariffs.
“232 Tariffs favor mills, not manufacturing,” said Mr. Capone.