Steel & Aluminum Tariffs

Companies that buy steel and aluminum used in manufacturing their products can buy steel from the US Steel plants in the US and aluminum from the Alcoa plants in the US. They will avoid the 25% tariff imposed by the US on steel and aluminum made overseas. The price of their steel and aluminum will be higher than they have been paying, but they have extra cash from the corporate tax reduction from 35% to 21%.

With all US companies attempting to order steel and aluminum will no doubt swamp the current US factories and they may need to buy foreign steel and aluminum and pay the 25% tariff cost near term, but they will be able to eliminate this after the backlog clears. US Steel is in the process of building 7 new plants and Alcoa should be expanding their US production now.

These tariffs certainly affect the US manufacturers of cars, agricultural equipment, construction equipment, construction steel for buildings, roads and bridges plus other products.  The companies who make these products are busy lining up their steel and aluminum suppliers and it’s a “pile on”. Some may need to pay the 25% tariff for months before US suppliers will be able to start filling their purchase orders.

American Signal Company located in Atlanta GA designs and manufactures traffic messaging signs. The trailers for these signs are steel and the sign cases are aluminum. These are the orange or yellow signs you see on the side of the road.  The messages are displayed using LED lights.  Some of these are over the highway. AMSIG orders large amounts of steel and aluminum to make these sign cases.

Because we are required to maintain our steel and aluminum suppliers in the US for military use, we will need to be able to impose tariffs to off-set dumping, but we should be able to automate our processes to keep costs competitive. If we are faced with the need for a military build-up like we did in World War II, we will certainly enlist all of our manufacturers to supply war production.

Norb Leahy, Dunwoody GA Tea Party Leader