U.S. Manufacturers Hurt By Tariffs Don't Like Quotas Either

Published: Friday, August 31, 2018 - 12:59pm

On Thursday, U.S. trade officials are reportedly pressing Mexico and possibly Canada to accept a quota plan to replace national security tariffs currently in place on imports of steel and aluminum.

Metals tariffs are not directly part of updating the North American Free Trade Agreement as negotiators race toward a Friday deadline. The United States imposed tariffs on metal imports in March, but at the time exempted Canada and Mexico. It extended the tariffs to both countries in June.

President Donald Trump signed proclamations Wednesday permitting targeted relief from steel and aluminum quotas from some countries. U.S. businesses are still looking for relief from tariffs.

“Most recently, within the last 30 days, we’ve seen a bigger hike. And the manufacturers are citing tariffs that are increasing the prices,” said Ken Goodrich is CEO is Goettl Air Conditioning in Tempe, which repairs and installs systems for homeowners. He uses aluminum and steel parts, which now cost more because of tariffs.

Goodrich is concerned that should the economy slow down, his business will not be able to absorb that plus the cost of a tariff.

“We’re in a very competitive market, therefore, the ability for our customers to eat those margins or eat those tariffs is a struggle.  So, it’s eroded our margin,” he said.

Trump placed import tariffs of 25 percent on steel and 10 percent on aluminum. The U.S., Mexico and Canada are working to steady trade relations in the wake of months of disruptions that have raised costs for manufacturers.  

The U.S. and Mexico are discussing a quota-based structure for steel and aluminum imports into the U.S. A quota system would keep U.S. prices high by limiting supply and lead to potential shortages. Any push for quotas faces strong opposition by manufacturers in all three countries.

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