Flint steel company on Trump tariffs: 'We'll start buying more American steel'
(03/08/2018) - Brent Taylor believes President Trump made the right decision by imposing tariffs on steel and aluminum imported into the United States.
The third generation saw operator at Taylor Steel Co. in Flint said the tariffs will allow U.S. steel and aluminum manufacturers to compete more with cheaper foreign products.
The United States once controlled the global steel market, but currently China accounts for 50 percent of steel manufacturing worldwide.
"They're buying steel over there because it was cheaper," Taylor said.
Economics professor Ed Derbin said Trump is using the tariffs to try reigning in China, which controls almost 50 percent of the global steel market.
"The aim to level that playing field because they are dumping," he said. "They're selling at below the market price, what the market price ought to be."
Putting the domestic steel and aluminum industry back on a more solid footing will bring back jobs lost as U.S. companies shrank amid stiff foreign competition, Taylor believes.
"As our mills get built up, start investing in themselves, getting people back to work, capacity will level off," Taylor said. "They won't need to go overseas as much."
Trump officially announced Thursday he is implementing tariffs of 25 percent on imported steel and 10 percent on aluminum. Canada and Mexico are exempt from the tariffs while other countries are invited to negotiate with the Trump administration to become exempt.
Specifically, Trump mentioned tariffs could be modified for other countries like Australia, which is the largest producer of iron ore in the world. Iron ore is a key component to making steel.
The tariffs are great news for the U.S. economy, Taylor said.
"I think the manufacturing base will get stronger," he said. "I think we'll start buying more American steel."
As with any major move affecting the economy, Derbin said the tariffs will create winners and losers.
"The workers in Pennsylvania and Ohio, the steel workers would definitely benefit from this," he said. "The consumer is going to end up paying for this. This is a tax, a tariff is a tax."
Taylor acknowledged cost increases likely will be passed onto his customers.
"As far as our customers go, they know it's coming," he said. "It's expected. No one's overly concerned. It is what it is."
Taylor and his uncle note the price of aluminum has already increased 20 percent.
Derbin said consumers will pay one cent more per can for products like soda and energy drinks. The auto industry also will be deeply affected.
"If this is going to be tacked onto the price of an automobile, this could harm us here in Southeastern Michigan," Derbin said.