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Industry Associations Blast Steel Tariffs

President Trump imposed tariffs on imported steel and aluminum in a move that has been criticized by manufacturing businesses, industry groups and many in Congress. The tariffs, designed to favor U.S. industries over their foreign competitors, contain an initial exemption for Canada and Mexico. The move is seen as a negotiating tactic as the administration seeks broader trade concessions from both countries as it renegotiates the North American Free Trade Agreement. Trump is opening the door to exemptions for other countries as well, saying he will consider exemptions for other allies that change their trade policies with the United States.

Association of Equipment Manufacturers (AEM) President Dennis Slater expressed his disappointment after the tariffs were announced:

"The equipment-manufacturing industry is profoundly disappointed at President Trump's actions to advance import tariffs on steel and aluminum. These 'Trump Tariffs' will put U.S. equipment manufacturers at a competitive disadvantage, risk undoing the strides our economy has made due to tax reform, and ultimately pose a threat to American workers’ jobs.

"Steel accounts for roughly 10 percent of equipment manufacturers' direct costs," Slater continued. "The price of steel has already risen in anticipation of the administration's actions, and a 25 percent tariff will only further erode the progress our industry has made over the past year.

"Our industry will work tirelessly in the coming days and weeks to convey the negative impacts of these tariffs directly to the Trump administration and members of Congress," Slated concluded. "President Trump should back away from these tariffs, and redouble his efforts instead on policies that will create manufacturing jobs – not put them at risk. 

The American Road and Transportation Builders Association (ARTBA) also weighed in on the negative impact of the tariffs.

"History shows the imposition of tariffs has the potential to increase the price of imported commodities and products," the organization said in a statement. "Steel is an important input for transportation construction – for every $1 spent on highway and bridge construction, 10 cents goes toward steel-related materials. As such, if President Trump’s new tariff on steel leads to price increases, there will be adverse effects on the transportation construction industry’s ability to deliver needed infrastructure improvement projects.   

The association noted that if prices increase for steel – whether domestic or imported – costs will also likely rise for construction and mining equipment, along with parts needed for maintenance. One U.S. equipment manufacturer, Terex Corp., announced March 6 it would implement a steel surcharge on its equipment to recoup the cost of steel price increases caused by the administration’s tariff.

Increased costs of purchasing and maintaining mining equipment that has steel components will result in increased costs of construction aggregates that are integral to projects

The Associated Equipment Dealers (AED) is concerned about the impact the tariffs could have on equipment distributors, manufacturers and their customers, and the effect on the cost of future infrastructure projects. The association said it will closely monitor implementation of the tariffs and work with other industry organizations, the administration and Congress to limit its impact on construction equipment dealers. 

AED did note that it was pleased that certain countries were exempted, particularly Canada, and that the administration has indicated a willingness to be flexible in excluding more countries.

"The United States operates in a global economy and when a country takes protectionist measures it will always raise concerns about the negative impacts," said AED President and CEO Brian P. McGuire, following the White House announcement. "However, similar to legislative and regulatory actions, the details matter and implementation is crucial. The coming weeks will be important to assess the Trump administration's commitment to accommodating the concerns of our key trading partners and allies and the impact it will have on on-going trade agreement negotiations, such as NAFTA. Accessible and efficient international trade is critical to continued economic growth and international competitiveness."

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, released the following statement in reaction to the new tariffs on imported steel and aluminum products: 

"These new tariffs will cause significant harm to the nation's construction industry, put tens of thousands of high-paying construction jobs at risk, undermine the President's proposed infrastructure initiative and potentially dampen demand for new construction projects for years to come. That is because the newly-imposed tariffs will lead to increases in what construction firms are forced to pay for the many steel and aluminum products that go into a typical construction project. 

"Firms that are already engaged in fixed-price contracts may be forced to absorb these costs, forcing them to cut back on new investments in equipment and personnel. Higher steel and aluminum prices will make the kind of infrastructure work President Trump supports more expensive, forcing federal, state and local officials to cut back on projects they can fund. And the likely trade war these new tariffs prompt will diminish demand for private investment in infrastructure as well as construction demand for manufacturing, shipping and distribution facilities.

"Considering the damages these new tariffs will inflict on the construction industry, it is easy to understand why recent, independent studies estimate that nearly 30,000 construction workers will lose their jobs because of these new tariffs.

"The bottom line is that any short-term gains for the domestic steel and aluminum industries will likely be offset by the lower demand that will come for their products as our economy suffers the impacts of these new tariffs and the trade war they encourage. A better way to cultivate a stronger domestic steel and aluminum industry is to increase federal funding for infrastructure projects that will boost demand for these and many other products. 

"That is why the Associated General Contractors of America will continue to take every possible step to convince the administration and Congress to reconsider these costly new tariffs and instead enact the kind of new infrastructure proposal that will rebuild our steel and aluminum industries while strengthening our overall economy."