The following article is from the Danville Register and Bee:
President Donald Trump’s tariffs on steel and aluminum imports will bring a rise in prices on raw materials, but some local businesses wonder if it will be worth it.
“It will definitely be a price increase, but it will give us American-made steel back,” said John Carey, president of Jarrett Welding Co. in Danville.
The 84-year-old business on Goodyear Boulevard makes parts for manufacturers, including handrails, mezzanines, and stairs. Jarrett performs a large amount of fabrication of structural steel, has a large machine shop and employs 23 workers.
“We support a lot of local manufacturers,” he said.
Carey and his wife Cindy, who co-owns the business, have to buy raw material to make products for their clients. Their customer base includes about 200 to 300 large, mostly commercial customers, plus walk-ins.
Trump’s proposed tariffs on imported steel and aluminum are expected to go into effect in about two weeks, and that will likely affect industries in the Dan River Region. The plan will impose a 25-percent tariff on imported steel and a 10-percent tariff on imported aluminum.
The president says the changes will protect American producers and enable them to rejuvenate their industries. But critics counter the move will prove costly.
“Tariffs on steel and aluminum are a tax hike the American people don’t need and can’t afford,” Utah Republican Sen. Orrin Hatch, who chairs the Senate Finance Committee, told the Associated Press last week. “I encourage the president to carefully consider all of the implications of raising the cost of steel and aluminum on American manufacturers and producers.”
Lee McMillan, a steel and aluminum analyst at Clarksons Platou Securities, told the AP that tariffs would decrease supply and raise prices.
“Simple supply and demand,” McMillan said. “You eliminate or substantially tax a good portion of supply, and the overall price, the domestic price, rises.”
The tariffs could also affect the construction budget of a carbide tool maker in Danville.
Kyocera SGS Precision Tools President Jason Wells said the changes could impact his initial budget numbers while he builds a new factory near the Institute for Advanced Learning and Research.
Wells has already seen a change when dealing with suppliers for the construction project. In anticipation of the tariffs, they’re shortening the period of validity when giving him quotes so they can raise prices if conditions change, he said.
“I’m starting to see suppliers hedge their bets,” he said.
The Virginia Chamber of Commerce issued a statement expressing concerns about the tariffs Thursday afternoon.
Barry DuVal, president and CEO of the state chamber, called them a “major concern for Virginia’s economy.”
“While the new tariffs are intended to reduce the demand for imported goods, thus opening the market to domestic producers, these new tariffs will directly harm Virginia manufacturers by raising costs for material, putting them at a competitive disadvantage in a global economy,” DuVal said in the statement.
The commonwealth imported more than $492 million in steel and aluminum in 2017, he pointed out. The tariffs could cost the manufacturing and construction industries up to $58 million, he said.
Also, 1,919 Virginia workers are directly employed in steel and aluminum production, and about 115,503 are employed in industries that use steel and aluminum, DuVal added.
