Water Efficiency

Deliberating Trump’s Tariffs

Are tariffs on metals in-line with infrastructure improvement?

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For decades American steel and aluminum companies have voiced concern over global competitors, claiming that subsidies in overseas economies have created unfair advantages in the global marketplace.

The Trump administration recently proposed the imposition of a 25% tariff on imported steel and a 10% tariff on imported aluminum. It announced these protectionist policies under the auspices of ensuring that other countries’ trade practices do not undermine domestic production and endanger US national security.

An estimated one-third of the 100 million tons of steel used each year by American business is imported, as is 90% of the 5.5 million tons of aluminum. Therefore, this trade decision is on-track to influence every major facet of the American economy. This has caused many of us in the water industry to wonder what impact the tariffs will have on America’s infrastructure, water conveyance systems, and storage technologies.

Under the Trump administration’s tariffs, a company importing $100,000 of steel would have to pay $25,000 to the government. The additional expense will be passed along to the consumer, experts predict, causing a significant increase in price for goods made with the metal. Prices for tanks, appurtenances, pipe materials, and service vehicles will reflect the increase. Water infrastructure projects across the nation will undoubtedly be affected by the rising costs of construction materials and machinery. As my colleague Arturo Santiago explains here, construction equipment manufacturers will also suffer a significant blow.

Jobs are another concern. While economists predict that the policy may create some jobs in domestic metal-production, it will undoubtedly cost jobs in industries requiring steel and aluminum. According to the Bureau of Economic Analysis, about 17 million Americans work in industries that use domestic steel—6.9 million in manufacturing and 10.1 million in construction. And according to a study by Lydia Cox of Harvard and Kadee Russ of the University of California, Davis, steel-using industries employ 80 times as many people as steel-producing industries. The higher cost of materials may not only reduce the production of goods made in the US, it may reduce the number of workers hired to make them.

We’d like to hear your thoughts. Do you feel that the tariffs are consistent with the administration’s infrastructure improvement goals?

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Comments

  1. Hi Laura…..I enjoy your articles. As far as the tariffs are concerned, I’m hoping that the President’s threat of imposing tariffs will open a dialog with countries like China and maybe those talks will bring the US steel and aluminum produces a more level playing field without having to impose the tariffs.

  2. Laura, much of this discussion assumes that steel is steel, copper is copper, and aluminum is all the same. Were that true, the arguments would be simple. While copper seems not to be on the list as yet, let me give you some ideas to ponder. We just made some major additions to the house and in the process needed to buy a lot of copper wire. It, unfortunately is not American because that seems to be the way things are going. It turns out to be brittle and when the electricians pulled gobs of it to all the new sub-panels and the additions and then twisted it around the screws of plugs and switches, it tends to fracture. But it fractures also inside the insulation where it can’t be seen and then when the system is turned on, legs are dead. That retracing takes a lot of time—a lot! Basically, we think that this wire is not heat-treated properly as doing so might cost a bit more and looking at it, one would never know. Then we have stainless, stated that compared to US stainless, there is lead that leaks out. Those in the water business are discussing that. In short, if we were getting the same quality, that would be one thing.
    Glass coming out of China is another. Pyrex copies, when heated explode. A quite beautiful glass cup from China with hot coffee exploded in my hand, but luckily not in my face. The list goes on and into defense materials. Steal or steel?

  3. As a distributor of aluminum and steel products for use in the construction industry, I have already seen an increase ranging from 5%-10% from my suppliers as a direct result of the tariff.

  4. The Rising cost from a Tariff is only for imported goods. The domestic goods that are passed on when purchasing because of the higher price will now be on a level playing field. This will affect projects, distributors and fabricators that are purchasing foreign goods. For those that have been purchasing American made metals will not see a difference in price. Tariffs are put into place to save American jobs of goods productions. Yes prices will go up but it will make the choice easier for consumers to see two items at the same price. One will be made with more American products and the other with foreign products. For my business we have been using all American goods in the first place so we will not see much of an affect. I am now happy that I made the choice to support American products in the beginning. For those that chose foreign made products I am sorry they will feel the squeeze but this will help my business because I can now be more competitive in a heavily under-priced foreign labor/ goods market

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