Local Businesses React to U.S. Tariffs

Local businesses say it is too early to tell how new and proposed U.S. tariffs on Mexican, Chinese, and Canadian goods will affect them but they are keeping a close eye on President Donald Trump’s trade policy.

President Trump imposed 25 percent tariffs on goods from Canada and Mexico last week, but days later, gave America’s two biggest trading partners a reprieve on some goods until April 2. It was the second time he threatened tariffs only to postpone them, following a slide in the U.S. stock markets. He also raised duties on Chinese goods and has announced plans to impose tariffs on goods from more trading partners next month.

Tower Extrusions, which makes large aluminum parts for a variety of industries, has seen the price of aluminum increase significantly, up 16 cents per pound over the past month, said Rue Rogers, Tower’s market manager and Olney’s mayor.

“The speculation of the tariffs caused the price of aluminum to increase before the tariffs even went into effect,” he said. Canada supplies about 80 percent of the raw aluminum used by U.S. extrusion plants, and the three or four U.S.-based smelters cannot meet domestic demand - forcing domestic extruders to import foreign raw material, Mr. Rogers said.

Tower, which has four U.S. locations, sells only to domestic customers, he said. “One negative [impact] is that it makes our customers have to pay more for aluminum at the end of the day,” he said. “Does that make aluminum less competitive? We’ll have to see.”

Tower expects the tariffs to have a positive effect on its business by halting transshipping of cheap aluminum products into the United States by China and several other countries. Malaysia, Vietnam, Ecuador, Colombia, India, and Mexico to name a few. These countries have been evading U.S. tariffs by funneling aluminum into Mexico, where it is extruded and shipped tariff- free into the United States due to Mexico’s 232 exemption. President Trump has eliminated all 232 exemptions which will level the playing field for domestic extruders versus foreign competitors, he said.

Tower President Mark Mc-Clelland traveled to Washing- ton D.C. last week along with a coalition of domestic extruders to lobby congressional lawmakers to advocate for the domestic industry to have a level the playing field, Mr. Rogers said.

“It is having a huge impact on price but the good thing is … that increase is applying to all material coming in,” he said.

CEMCO Inc. of Olney, which manufactures mobile concrete batch plants and sells them worldwide, has not seen any effects from the tariffs yet, said sales associate Justin Pieget.

“As of right now, I have not seen the tariffs affect CEMCO because almost everything we purchase is here in the United States,” he said. “Control systems and everything is U.S.-made products. As far as production, I haven’t heard from anyone in production and purchasing to say anything has changed yet. So it either hasn’t trickled down or it won’t.”

Tariffs on Mexican produce were expected to boost grocery store prices and affect supplies, but Stewart’s Food Store owner Robert Stewart said he did not expect much effect on his deliveries from Affiliated Foods of Amarillo.

Although Affiliated does supply produce from Mexico, it also sources the same items from Honduras, Peru and Chile, he said. “One week we may get produce from Australia, New Zealand, or the Netherlands,” he said. “We have Mexican products but they are duplicated by U.S. products.”

The store sources its meat domestically, and seafood comes from China but also Indonesia and Vietnam, he said.

“I expect it to be minimal and short term,” he said of any effects of the tariffs.