The United States buy more steel from Canada than from any other country, and that import will become much more expensive at rates that President Trump imposes this week.
That is good news for Stephen Capone, president of Capone Iron Corporation of Rowley, Massachusetts, who makes steel stairs, handrails, grilles and other products and has around 100 employees. Too long, he said, Canadian competitors flooded the New England market with cheap steel products, which means that his and other local companies cannot win.
“It doesn't matter how low we offer, they can bid into every job,” said Mr. Capone, “they decimate our market.”
Many companies oppose Mr Trump's rates, for fear that they will increase costs and cause retribution to their products by other countries. The Chief Executive of Ford Motor, Jim Farley, said last month that rates 'could blow a hole' in the American car industry, and retailers have warned that they will lead to higher prices for consumers.
But there are deep support for his trade policy in the business world, especially among managers who say that their industries have been damaged by unfair trade.
In particular, the leaders of American steel and aluminum companies have long argued that foreign rivals undermine them because those rivals benefit from subsidies and other government support. And they say that when they are imposed without meshes, rates have been effective to stimulate more investments in the United States.
Mr. Trump suspended wide rates on Thursday that he had imposed two days earlier on import from Canada and Mexico. But rates for steel and aluminum products, authorized under a national security provision called section 232 of the Trade Expansion Act, are planned to come into effect on Wednesday.
“President Trump was chosen with a sounding mandate to level the playing field for American manufacturers and employees who use rates, and he is dedicated to deliver that mandate – including for our Keystone Steel and Aluminum Industries,” said Kush Desai, a spokesperson for the White House.
The rates apply a levying of 25 percent to steel and aluminum import from Canada, Mexico and other countries.
In his first administration, Mr Trump section set up 232 rates for steel and aluminum, but Mexico and Canada were given exemptions from them when a new trade agreement between those countries and the United States came into force in 2020.
Jesse Gary, Chief Executive from Century Aluminum, an American aluminum producer, supported the aluminum rates during the first term of Mr Trump, but said that the exemptions had made them less effective and were happy that they were offered again.
“The new rates will close those meshes again and enable us to start investing again, and attracting more production here in the US,” he said.
Philip Bell, president of the Steel Manufacturers Association, an American trade group, said that there had been an increase in steel imports in recent years. He said that Mexican companies imported cheap steel from China, made light changes and exported to the United States as if it were being produced in Mexico.
The administration of Biden moved last year to stop practice by applying a 25 percent rate on Mexican steel that was melted or cast outside of North America before it was converted into an end product. Mr. Trump's rates continue by registering on all the steel from Mexico.
“The president sends a clear message to our trading partners that it's time to get serious about their trade relations with the United States,” said Mr. Bell.
Canadian steel companies reject accusations that they are violating trade rules.
“Our members are deeply committed to a North -American steel market that is protected against unfair commercial practices, and we do not contribute to global overcapacity with our production levels that remain under the steel demand of Canada,” said Catherine Cobden, President of the Canadian Steel Producation, a trade group, in a statement.
Although the rates of American steel and aluminum manufacturers can enable to take a larger part of the domestic market, the question is whether they make the large investments needed to expand capacity.
Steel companies did this after the rates of the first Trump administration. Timna Tanners, a director of Wolfe Research for Metal Companies, said that American companies can add sufficient capacity to replace imported steel in many markets. But, she added, fear of creating an abundance could temper their plans.
“The Mills don't seem to want to run so fast because they also think that that could put pressure on prices, and they prefer to enjoy higher prices,” said Mrs. Tanners.
Last year the import of finished steel accounted for around 23 percent of the market, according to the American Iron and Steel Institute. The United States is much more dependent on the import of aluminum.
American smelters dominated the production of primary aluminum – aluminum derived from raw materials instead of recycling – but today China makes much more than any other country. The Commerce department found that the United States imported 90 percent of its primary aluminum in 2016.
The Economic Policy Institute, a left -wing think tank, has credited the section 232 rates of Mr Trump's first administration for somewhat new life in the primary aluminum industry.
Century, the largest producer of primary aluminum in the United States, is planning to build a new aluminum melt factory, the first in the United States in 45 years. It aims to do this with a grant of a maximum of $ 500 million granted by the BIDEN administration using funds from the Inflation Reduction Act and the Infrastructure Investment Act. Century still has to obtain considerable additional financing to build the factory. And the Trump government assesses subsidies that are applied in the context of the Inflation Reduction Act.
Asked if the assessment endangers the plans, Mr. Gary said: “We think the new project fits completely, exactly the type of investment that this administration wants to do,” adding that building the factory could create 5,500 jobs and that operating 1,000 full -time employees would require.
Yet the American aluminum industry is spread over the latest rates of Mr Trump, largely because American companies in Canada have factories that would be affected by the taxes. Charles Johnson, the president of the Aluminum Association, a trade group, said on LinkedIn last month that, although he, although he supported some aspects of the 232 rates section, the United States “needed a reliable source of metal from Canada to support the jobs and investments that took place today.”
If rates increase the prices of steel and aluminum, companies that use the metals in their products can pass on the extra costs to consumers or replacements.
Trade unions also support Mr Trump's rates, but have sometimes objected to how he imposed them. The United SteelWorkers Union has criticized its targeting from Canada, where it has more than 225,000 members, saying that the steel trade with Canada is fair.
“We call in the president to go further, to distinguish between trading claasers and trusted allies who work reliably with us to promote our national and economic security,” said David McCall, international president of the United SteelWorkers, in a statement.
Mr Capone, the Massachusetts Steel Executive, wants Mr. Trump's steel rates to be even more difficult. They release the steel import from Canada from rates when the Canadian company steel in American Mills manufactures. He said that much more work was involved in manufacturing the steel – converting into products such as stairs and grilles – than in its production, and said that this should be reflected in the rates.
“The 232 rates prefer the mills, not the manufacturers,” said Mr Capone.
