The U.S. Manufacturing Industries Paused by The New Import Tariff

When the construction equipment demands were boosted up, owner of Gradall Industries in Ohio, Mike Haberman, was planning to hire more than 30 new workers for his manufacture plant in the early February. 

Now, after the steel’s cost which used in Gradall’s telescopic excavator and vacuum truck were suddenly raised by one-third because of the Trump administration decision on steel imports, he postpones it. 

Knowing that the cost for the steel is 35 percent of his production cost, Haberman fears that the surging prices would not only hurt his export sales but also give his foreign rival some advantages. 

He said, right now all he wants is to be given more visibility before bring in more workers. 

Trump’s supporters predicted that business world would respond the $1.5 trillion package of tax cuts at the end of 2017, with a surge in hiring and investment. 

The recent U.S. economic data reveal that Trump’s protectionist trade policy is making some of the small to mid-sized manufacturing executives to take the more careful approach, and forcing them to put new investment and hiring plan on hold. 

Although this manufacturer praised the Trump administration’s decision to make U.S. business more competitive globally with the tax cuts and a deregulation drive, they complained that the new steel and aluminum tariffs along with the ‘trade wars’ with China were shrinking those obtained benefits. 

Trump administration proposed a new 25 percent import tariff on 1300 Chinese product to try to force a change in Beijing’s practices. If the tariff’s proposed comes into effect, it will put an end to Haberman’s supplies from China. 

At first, the steel and aluminum import tariffs proposed in March were aimed to protect the American industries and its workers from global unfair trade practices. Trump believed that it was important for the U.S. national security.  He said that the tariff would re-open closed mills, sustain a skilled workforce, and maintain or even increase production. 

According to these manufacturing company executives,  the tariff which came into effect on March 23, has increased raw material costs and caused supply delays, obstructing the manufacturers’ “Made in the USA” products uncompetitive against their foreign rivals.

Mike Schmitt, president at The Metalworking Group in Ohio, said his company has lost around a thousand hours repricing and renegotiating contracts because it can’t value the old prices.

Mike’s company has to postpone plans to spend around half a million on equipment this year and bring on new workers.

The Institute for Supply Management (ISM) Tuesday’s survey showed how the overall sentiment is: for a second straight month in April, manufacturers slowed down hiring amid criticism that the tariffs have brought business planning to a dead end.

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