The United States buys more steel from Canada than from any other country, and those imports will become much more expensive under the rates that President Trump intends to impose this week.
That is good news for Stephen Capone, president of Capone Iron Corporation by Rowley, Massachusetts, which manufactures steel stairs, handrails, grilles and other products and has about 100 employees. For too long, he said, Canadian competitors have been flooding the New England market with cheap steel products, preventing their local companies and other local companies from winning business.
“It doesn’t matter how low, we offer, they can submit to any job,” said Capone, “they are decimating our market.”
Many companies oppose Mr. Trump’s tariffs, for fear of increasing costs and causing reprisals against their products through other countries. The executive director of Ford Motor, Jim Farley, said last month that tariffs could “fly a hole” in the United States automotive industry, and retailers have warned that they will lead at higher prices for consumers.
But there are deep support bulbs for their commercial policies in the business world, particularly among executives who say their industries have been harmed by unfair trade.
In particular, the leaders of the American and aluminum companies have long sustained that foreign rivals undermined them because these rivals benefit from subsidies and other government support. And they say that tariffs, when they are imposed without lagoons, have been effective to stimulate more investments in the United States.
Mr. Trump suspended broad tariffs on Thursday that he had imposed two days before in the imports of Canada and Mexico. But tariffs on steel and aluminum products, authorized under a national safety provision called Section 232 of the Commercial Expansion Law, are scheduled to enter into force on Wednesday.
“President Trump was chosen with a resounding mandate to level the playing field for American manufacturers and workers who use rates, and is committed to complying with that mandate, even for our Keystone Steel and aluminium industries,” said Kush Desai, a White House spokesman, in a statement.
Tariffs apply a 25 percent tax on Steel and Aluminum imports in Canada, Mexico and other countries.
In his first administration, Mr. Trump imposed tariffs of section 232 on steel and aluminum, but Mexico and Canada obtained exemptions from them when a new commercial agreement between those countries and the United States entered into force in 2020.
Jesse Gary, executive director of Century Aluminium, an American aluminum producer, supported aluminum tariffs during Mr. Trump’s first mandate, but said that the exemptions had made them less effective and I was happy to see that they reimpose.
“The new tariffs will close those gaps and allow us to start investing again, and generate more production here in the United States,” he said.
Philip Bell, president of the Association of Steel Manufacturers, an American commercial group, said there had been an increase in steel imports in recent years. He said that Mexican companies were importing cheap steel from China, making slight alterations and exporting it to the United States as if it were produced in Mexico.
The Biden administration moved last year to stop the practice by applying a 25 percent tariff on Mexican steel that melted or poured out of North America before becoming a finished product. Trump’s tariffs go further by postulating all steel from Mexico.
“The president is sending a clear message to our commercial partners that it is time to take their commercial relations with the United States seriously,” Bell said.
Canadian steel companies reject accusations that they are breaking the commercial rules.
“Our members are deeply committed to a North American steel market that is protected from unfair commercial practices, and we do not contribute to global overcapacity with our production levels that are below the demand for steel in Canada,” said Catherine Cobden, president of the Canadian Association of Steel Producers, a commercial group, in a statement.
While tariffs could allow steel and aluminum manufacturers of the United States to take a greater proportion of the domestic market, the question is whether they make the large investments necessary to expand capacity.
The steel companies did it after the tariffs of the first Trump administration. Timna Tanners, managing director of Wolfe Research that covers metal companies, said US companies could add enough capacity to replace imported steel in many markets. But, he added, the fear of creating an excess could moderate his plans.
“The mills do not seem to want to run so hard because they also think that this could press the lowest prices, and prefer to enjoy higher prices,” Tanners said.
Last year, finished steel imports represented around 23 percent of the market, according to the American Iron and Steel Institute. The United States depends much more on aluminum imports.
The American foundations used to dominate the production of primary aluminum, aluminum derived from raw materials instead of recycling, but today China does much more than any other country. The Department of Commerce found that the United States imported 90 percent of its primary aluminum in 2016.
The Institute of Economic Policy, a group of leftist experts, accredited the tariffs of section 232 of the First Trump administration to relive the primary aluminum industry.
Century, the largest primary aluminum producer in the United States, plans to build a new aluminum cast iron plant, the first in the United States in 45 years. Its objective is to do it with a subsidy of up to $ 500 million that was granted by the Biden administration using funds from the Inflation Reduction Law and the Infrastructure Investment Law. Century must still obtain significant additional financing to build the plant. And the Trump administration is reviewing subsidies granted under the inflation reduction law.
When asked if the review puts the plans at risk, Mr. Gary said: “We believe that the new project fits exactly the type of investment that this administration wants to make.”
Even so, the US Aluminum Industry is divided into the latest Rates of Mr. Trump, largely because US companies have plants in Canada that would be affected by taxes. Charles Johnson, president of the Aluminum Association, a commercial group, said on LinkedIn last month that, although he supported some aspects of section 232, the United States needed “a reliable source of Canada’s metal to support jobs and investments that occur today.”
If tariffs increase steel and aluminum prices, companies that use metals in their products can transmit additional costs to consumers, or find substitutes.
The unions also support Mr. Trump’s tariffs, but sometimes they have opposed how he has imposed them. The United Steelworkers Union has criticized its goal of Canada, where it has more than 225,000 members, saying that the steel trade with Canada is fair.
“We call on the president, in the future, to differentiate between commercial cheats and trust allies who work reliably with us to advance our national and economic security,” said David McCall, international president of United Steelworkers, in a statement.
Capone, the Massachusetts Steel executive, wants Mr. Trump’s steel rates to be even more hard. They exempted Canada’s steel imports from the rates if the Canadian company is making steel made of Americans. He said that there was much more work involved in the manufacture of steel, turning it into products such as stairs and grilles, than to manufacture it, and said that should be reflected in rates.
“The 232 tariffs favor the mills, not manufacturers,” Capone said.
