This story was originally published in ProSales.
Distributors and users of steel products expect recently increased prices to remain at least at current levels as people sort out the implications of President Trump's executive order March 8 imposing a 25 percent tariff on steel imported from all countries except Canada and Mexico.
Ken Simonson, chief economist for the Associated General Contractors, predicted to the Salt Lake Tribune that prices for both imported and domestic metals "is likely to rise immediately. ... Bid prices will rise for future projects.”
"Anything made of steel has already jumped in price AND availability is poor as many companies (Including ours) loaded up on steel products to lock in supply at lower cost as we fulfill orders taken before prices spiraled upwards," said Jim Sobeck, president and CEO of New South Construction Supply in Greenville, S.C. "Due to this, most steel mills are sold out thru mid-April or longer."
Kinzler Construction of Ankeny, Iowa, which sells steel studs and drywall along with its insulation installation business, told Des Moines' WHO-TV that its suppliers raised their prices as soon as Trump started talking about tariffs.
"We're being as proactive as possible," General Manager Brian Wulfekuhle told the station. "We're ordering in as much extra material as we could possibly get in advance of the tariffs to make sure we're doing everything we can to help our customers."
One of Kinzler's fears is that contractors could choose to switch to wood framing instead of steel to cut costs, the station said.
Larry Williams, executive director of the Steel Framing Industry Association, said his members' nervousness over the tariffs this past week came in part because they didn't know which countries and products would be penalized. As it turned out, Trump ultimately exempted Canada and Mexico, which account for a quarter of U.S. steel imports, pending how they do in future talks over the North American Free Trade Agreement (NAFTA). Trump kept in countries like Brazil (13 percent of all steel imports) and South Korea (10 percent).
The regulations take effect in two weeks, and the U.S. Commerce Department is due to release regulations for the tariffs within 10 days, Bloomberg reported. It quoted Treasury Secretary Steve Mnuchin as saying that the secretary of commerce is entitled to issue waivers for specific products, while only the president can exempt entire nations.
Business groups, companies, and members of Congress pushed against Trump's tariff plans, in part out of fear that his actions could lead to a trade war. And in fact, shortly before Trump signed the executive order imposing tariffs and steel and aluminum, the European Union said it was ready to impose its own tariffs on U.S. bourbon, peanut butter, cranberries, and orange juice.
To read more stories like this, visit ProSales.
