Trump Administration Plays the Tariff Game
[Headline from DRJ]
Reuters — Why one U.S. can-maker avoids Trump’s tariffs while rivals pay up:
One of the largest U.S. producers of aerosol cans, Colorado-based Ball Metalpack, has laid off 91 of its 500 U.S. workers since President Donald Trump imposed a 25% tariff on imported steel that abruptly hiked the firm’s raw materials costs.
At a chief competitor, DS Containers, the story is different. The subsidiary of Japan’s Daiwa Can Co has added more than 80 workers over 18 months at its two Illinois plants, bringing employment to 232.
Rivals of the Japanese-owned firm say the reason for its success is simple – it’s not paying the tariff, allowing the firm to snatch business from competitors who have been forced to raise prices to cover their higher materials costs. The U.S. Commerce Department granted DS Containers an exemption from the import tax because it uses a raw material, plastic-laminated steel, that isn’t produced by U.S. steelmakers.
Firms that use standard tin-plated steel, including Ball Metalpack and Mauser Packaging Solutions, have seen their exemption applications denied or delayed by Commerce after U.S. steelmakers objected to them, arguing the material is available domestically. Executives from the can makers counter that domestic steelmakers can’t produce nearly enough tinplate to meet their needs – forcing them to keep importing and paying tariffs.
I think Patterico is right about tariffs. Picking winners and losers is what Trump does when he uses tariffs.
— DRJ
One of my long-time clients is a family-owned Houston company that normally employs about 100 people as a specialty manufacturer of a particular type of oilfield equipment, the materials for which are, of necessity, imported. Since Trump’s tariffs, they’ve been forced to cut their staff by about 20, and company revenues are down about 40%. The owners are simply hoping they can survive Trump’s process of picking winners and losers.
Beldar (fa637a) — 6/14/2019 @ 11:15 amAt least they are using some kind of principle, but the principle isn’t good.
The exemption is for using it using a raw material that isn’t produced by U.S. steelmakers. But when it is produced, but in limited quantities, which can’t suddenly be raised, the manufacturer can object to the exemption, and even though there’s a way to challenge that objection, it can usually prevent the exemption.
The whole thing is governed by specious logic. This whole idea of alternatives available or not available is not good. The tariffs probably won’t last, though.
Sammy Finkelman (102c75) — 6/14/2019 @ 11:30 amLets let chinese commies pick winners and loser instead. We need another house un-american activities committee led by AOC to “deal” with free trade traitors. free traders should be delt with like the rosenbergs were for harming this country. I think AOC could handle the roy cohen part.
lany (273687) — 6/14/2019 @ 1:17 pm