Wednesday, June 20, 2018

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Local firms fear impact of proposed tariffs on steel, aluminum

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    Jessica Myers sanitized cans before they are filled and relabeled with Almynd Joyz beer at The Brewing Projekt in Eau Claire Wednesday. The craft brewer is among companies with concerns about how proposed tariffs on imported steel and aluminum would impact their businesses. View more photos at LeaderTelegramPhotos.com.

    Staff photo by Dan Reiland
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    Jessica Myers sanitizes cans before they are filled and relabeled with Almynd Joyz beer Wednesday at The Brewing Projekt in Eau Claire. The craft brewer is among companies with concerns about how proposed tariffs on imported steel and aluminum would impact their businesses. View more photos at LeaderTelegramPhotos.com.

    Staff photo by Dan Reiland
    Buy This Image

While President Donald Trump’s proposal to impose tariffs on imported steel and aluminum is enacted remains uncertain, several Chippewa Valley businesses whose processes include the use of those metals worry the measure would increase costs to themselves and consumers. 

The president’s push to increase tariffs would boost manufacturing costs for American businesses using those metals, they said, and could restrict sales of those products produced in this country. 

The White House on Wednesday said Canada, Mexico and other countries could be spared from U.S. tariffs on steel and aluminum imports. Trump is expected to authorize the tariffs by the end of the week, according to news reports.  

The tariffs would impose a duty of 25 percent on steel and 10 percent on aluminum to counter cheap imports, especially those from China.

“From what we’ve seen through the Wisconsin Brewers Association, it looks like packaging costs (for canning beer) would rise 10 or 11 percent,” said William Glass, owner of The Brewing Projekt, a craft beer brewer in Eau Claire. “Those costs are already pretty expensive, and this would increase prices for both producers and consumers.”

 One large brewery in this part of Wisconsin also opposes the higher tariff. A spokesman for MillerCoors, the parent company of Jacob Leinenkugel Brewing Co. in Chippewa Falls, said the measure could lead to job losses in the beer industry.

The proposal will cause aluminum prices to rise, MillerCoors spokesman Marty Maloney said in a statement, which could boost costs and prices. 

“American workers and American consumers will suffer as a result of this misguided tariff,” he said. 

In addition to boosting can costs, Glass said, he wonders how Trump’s plan would impact the cost of stainless steel kegs. As part of his business expansion, Glass said he will buy about 50 new kegs, “and every added cost we have impacts your bottom line.”

Not all businesses oppose the tariffs. Matt Tietz, owner and vice president of McDonough Manufacturing of Eau Claire, acknowledged the proposal is likely to boost costs at his business — which makes parts for sawmills — and others using those metals. 

However, if the tariffs are enacted they likely won’t add significantly to product costs, Tietz said, and imposing them could help address trade agreements that adversely impact the U.S., he said. 

“I think in the long run (the tariffs) would continue to grow our economy and lead to more U.S. steel sales to other nations,” he said.

The tariffs also could act to slow inflation more naturally than the Federal Reserve raising the interest rate to do so, Tietz said.

“This approach would be more unconventional, but in the long run ... I think it would be more effective,” he said.

Spokespeople for Veritas Steel of Eau Claire and Bush Brothers & Co. in Augusta said they are waiting to see whether the tariffs are enacted before commenting on them.

Some Republicans, including Wisconsin Gov. Scott Walker and U.S. House Speaker Paul Ryan of Janesville, along with many Democrats, said they oppose the tariffs. They expressed concerns they could lead to trade retaliation and could threaten jobs.

Contact: 715-830-5911,julian.emerson@ecpc.com

INSIDE

White House says exemptions on tariffs would be made on a “case by case” and “country by country” basis/​3A


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