In case you haven’t heard, President Donald Trump recently imposed tariffs on U.S. imports of steel and aluminum. The 25 percent tariff on steel and 10 percent tariff on aluminum went into effect on June 1, 2018. Trump’s goal with these tariffs is to level the playing field for American manufacturers. While these tariffs will ultimately benefit the American steel and aluminum industries, they may also impact other industries. USA Today highlights a few winners and losers of Trump’s tariffs here.
As one of the largest insurance firms in the Birmingham metropolitan area, our team at J.R. Prewitt & Associates services businesses in several industries, including manufacturing, construction, food processing and distributing, that may feel the ripple effects of these tariffs.
- Manufacturing: Steel and aluminum are crucial raw materials for cars, planes, machinery and appliances made in the United States. Consequently, the new tariffs will increase production costs for manufacturers and prices for consumers. com points out that Alabama’s chief export is transportation equipment, which relies heavily on steel. According to CNN Money, in 2017, a third of the steel used by American businesses and more than 60 percent of the overall supply of aluminum was imported.
- Construction: Similarly, contractors who use steel and aluminum will be hit with increased building costs. These increased building costs could impede construction projects ranging from infrastructure to residential. In fact, one report predicts 28,000 construction jobs will be lost due to tariffs.
- Food Processing: Food and beverage producers that package their products in aluminum cans will also be affected by the price increase. For instance, the Alabama brewery community is concerned the tariffs could adversely affect their businesses.
- Distribution: Supply Chain Dive reports that U.S. manufacturers will be forced to adjust their supplier base to cope with rising costs of steel and aluminum. Part of Trump’s goal with his tariff decision was for companies to shift their sourcing to domestically-made materials.
All in all, only time will reveal the true impacts of the new steel and aluminum tariffs. As conditions change in the insurance marketplace, J.R. Prewitt & Associates remains on top of the situation and will work hard for you to make sure your needs are met.