Ahead of VP Mike Pence's visit to Nucor in Auburn, mixed reviews of steel tariffs
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Ahead of VP Mike Pence's visit to Nucor in Auburn, mixed reviews of steel tariffs

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Nucor

Nucor Steel in Auburn. 

Vice President Mike Pence will visit Nucor Steel in Auburn Tuesday to highlight the benefits of a tax overhaul enacted late last year, but another issue could be mentioned: The Trump administration's decision to impose tariffs on steel imports. 

Trump's Commerce Department conducted Section 232 investigations to determine if aluminum and steel imports threatened U.S. national security. The findings of the inquiries led to 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports. 

Earlier this month, the Trump administration opted to apply the tariffs to steel imports from key allies, including Canada, Mexico and the European Union. 

Nucor is one of the biggest supporters of the tariffs on steel imports. Drew Wilcox, the now-former general manager of the company's mill in Auburn, lauded Trump for imposing the tariffs. 

"The president has consistently been a strong advocate for holding other countries accountable that systematically and flagrantly violate international trade agreements and free market principles," Wilcox said in March. 

The action by Trump also drew praise from United Steelworkers, a union representing more than 850,000 workers in several industries. While the union, Nucor and others in the industry support the tariffs, some experts question whether the trade actions will be effective. 

Dr. Devashish Mitra, an economics and global affairs professor at Syracuse University's Maxwell School of Citizenship and Public Affairs, believes the tariffs will hurt several industries and workers. 

"Firstly, steel is an input into many products, such as cars and trucks. Also, construction is heavily dependent on steel. Tariffs on the imports of steel will make steel more expensive here, thereby raising the cost of production in steel-using industries and making them less profitable. These steel-using industries will then cut employment," Mitra said. 

He continued, "In addition, our consumers will end up paying higher prices for those products, which means this will be a tax on our consumers, lowering their real disposable income. As a result, the domestic demand for products will be lower, so output and employment will be lower."

The Trump administration's tariffs on steel imports from key allies, including Canada and the European Union, have raised concerns about retaliatory duties. Even the United Steelworkers, which supports the tariffs, believes Canada should be exempt from the trade action. (The union's membership extends into Canada.) 

Mitra cautioned that U.S. export industries could lose employment, output and profits if countries retaliate and impose tariffs on American products. 

"For example, other countries are imposing tariffs on many of our agricultural products," he said. "That is going to hurt our farmers and agricultural workers." 

Small businesses that rely on steel for manufacturing products could be affected by the tariffs. Copper John Corporation, an Auburn-based archery accessories manufacturer, uses steel and other metals to produce its product line. But Doug Springer, the company's co-founder, said the tariffs won't have much of an impact on his business. 

Springer's main concern is if other countries and trading blocs, namely the European Union, retaliate against U.S.-made goods. 

"If the EU were to put a tariff on sporting goods in general as opposed to metal items, it could really hurt us because we do a lot of business in Europe and a lot in Asia," he said. 

But Springer supports Trump's efforts on trade. Based on his own experience exporting goods into international markets, he believes in the notion of fair trade. 

"These invisible barriers that you hear Trump talk about are not pie in the sky," he said. "They absolutely exist. They are not overwhelming. We still do a lot of business over there. But there are just these insidious little things. It's like New York state's version of taxation versus a southern state's. They just get you every time." 

Online producer Robert Harding can be reached at (315) 282-2220 or robert.harding@lee.net. Follow him on Twitter @robertharding.

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