President Donald Trump pitched his steel tariffs as a way to save U.S. steel jobs, saying it was a move designed to urge “all companies to buy American.”
However, some small businesses, like LOOK Trailers in Indiana, are feeling the heat from Trump’s trade move.
LOOK’s president, Matt Arnold, said the company has seen steel prices increase 25 percent and aluminum as high as 35 percent. He told CNBC that he’s afraid his suppliers’ prices have even further to run in the months ahead.
Although the company already uses 75 percent U.S. steel and aluminum, now its competitors are also moving from foreign to domestic steel. That’s driving up the demand for steel producers domestically and adding costs to businesses’ bottom lines.
Arnold said that the company has managed to honor fixed prices on committed orders, but that means they’ve been “getting hit and absorbing price increases and then pricing out three months.”
He said the net effect has been the same on the whole industry in this area.
“Whether you’re public or private the hit has been to your bottom line,” Arnold said.
Trump has said he hopes shuttered steel mills will reopen and add new life into the American steel industry. But that process could take more than year, if not longer, leaving some businesses without enough U.S.-made steel and aluminum.
Arnold said another factor affecting his business is rising wages because of a tightening labor market.
“It’s a battle every day. It’s how to get more out per man hour. While battling rising wages, competitive workforce, and now you add the third one, which is rising raw materials. You have to be right today. There’s no margin for error,” he said.
The average cost of a trailer from LOOK is about $3500, which is already a 9 percent jump from 2017.
The last time the U.S. slapped major tariffs on steel imports, under President George W. Bush in 2002, companies like LOOK Trailers experienced a 10 to 15 percent hike in prices and a drop in sales. Businesses are hoping this time will be different.
