Trump metal tariffs wreak havoc on US factory

New Straits Times

2 days ago

BELCAMP, US: In the sweltering US summer, metal containers decorated with snowmen and sleighs are taking shape – but tempers are also rising as their manufacturer grapples with President Donald Trump's steep steel tariffs.
At Independent Can's factory in Belcamp, Maryland, northeast of Baltimore, CEO Rick Huether recounts how he started working at his family's business at age 14.
Huether, now 73, says he is determined to keep his manufacturing company afloat for generations to come. But Trump's tariffs are complicating this task.
"We're living in chaos right now," he told AFP.
Since returning to the presidency in January, Trump has imposed tariffs of 25 per cent on imported steel and aluminium and then doubled the rate to 50 per cent.
This has weighed on operations at Independent Can, and Huether expects he eventually will have to raise prices.
With the steady beat of presses, steel plates that have been coated with tin – to prevent corrosion – are turned into containers for cookies, dried fruit, coffee and milk powder at Huether's factory.
But there is not enough of such American-made tinplate for companies like his.
"In the United States, we can only make about 25 per cent of the tinplate that's required to do what we do," in addition to what other manufacturers need, Huether said.
"Those all require us to buy in the neighbourhood of 70 per cent of our steel outside of the United States," he added.
While Huether is a proponent of growing the US manufacturing base, saying globalisation has "gone almost a little bit too far," he expressed concern about Trump's methods.
Trump has announced a stream of major tariffs only to later back off parts of them or postpone them, and also imposed duties on items the country does not produce.
For now, Independent Can – which employs nearly 400 people at four sites – is ruling out any layoffs despite the current upheaval.
But Huether said one of the company's plants in Iowa closed last year in part because of a previous increase in steel tariffs, during Trump's first presidential term.
With steel tariffs at 50 per cent now, Huether expects he will ultimately have to raise his prices by more than 20 per cent, given that tinplate represents a part of his production costs.
Some buyers have already reduced their orders this year by 20 to 25 per cent, over worries about the economy and about not having enough business themselves.
Others now seem more inclined to buy American, but Huether expressed reservations over how long this trend might last, citing his experiences from the Covid-19 crisis.
"During the pandemic, we took everybody in. As China shut down and the ports were locked up, our business went up 50 per cent," he explained.
But when the pandemic was over, customers turned back to purchasing from China, he said.
"Today if people want to come to us, we'll take them in," he said, but added: "We need to have a two-year contract."
Huether wants to believe that his company, which is almost a century old after being founded during the Great Depression, will weather the latest disruptions.