This Tariff Scheme Would Squash American Businesses
By Rick Huether
My family's can company, Independent Can, has survived the Great Depression, the Great Recession, two world wars, and 16 presidential administrations. But now, an Ohio steel conglomerate could threaten that legacy of success.
If it gets its way, we won't be the only ones in trouble. Their plan threatens tens of thousands of U.S. manufacturing jobs.
How did we get here? Ohio-based steel giant Cleveland-Cliffs recently petitioned the U.S. International Trade Commission to impose tariffs of up to nearly 300% on imported tinplate steel.
The Department of Commerce, fortunately, doesn't seem to be on board. Its preliminary decision on the tariffs, released in August, rejects these extreme duties. But a final decision isn't expected until early next year -- so American jobs and manufacturers are still at risk.
Tinplate is used to make cans for a huge range of goods, from soup to paint cans to bug spray. My company specializes in custom and decorative products -- from the popcorn and cookie tins popular at Christmastime to cans full of coffee beans at cafes.
Cleveland-Cliffs claims that eight countries are flooding the U.S. market with low-cost tinplate steel. The eight countries on that list are Canada, China, Germany, the Netherlands, South Korea, Taiwan, Turkey, and the United Kingdom. Seven of those are U.S. allies. The eighth, China, accounts for around 10% of all U.S. tinplate steel imports.
At Independent Can, we buy U.S.-made tinplate when we can. But domestic steel manufacturers only have the capacity to produce about half of the tinplate that U.S. can makers need. So we rely on imports from Canada and Europe to be able to make the affordable, high-quality decorative tins our customers need at a price they're able to pay.
Cleveland-Cliffs is essentially asking for federal protection from foreign competition at the expense of smaller manufacturing businesses like mine. Facing higher prices for our own inputs, we'll have to raise the price of our products. Demand for cheaper cans and decorative tins made overseas will increase, as my customers turn to companies from China, Mexico, and other countries -- all because of these tariffs.
It's not as though Cleveland-Cliffs is seeking an assist from the federal government because it's in financial trouble. Its revenue has skyrocketed in recent years, and it expects 2023 to be its best shipment year ever.
A study by Trade Partnership Worldwide forecasts that three years after the tariffs kick in, if they are applied to their fullest extent, U.S. can production would decline by nearly 20%. That would force canning companies to cut manufacturing jobs by nearly 30%. Further downstream, the decline in domestic can production would pressure U.S. food manufacturers to cut nearly 40,000 union and non-union jobs.
Ronald Reagan once warned, "We should beware of the demagogues who are ready to declare a trade war against our friends -- weakening our economy, our national security, and the entire free world -- all while cynically waving the American flag."
Yet that's exactly what Cleveland-Cliffs wants to do. I urge the Department of Commerce and the International Trade Commission to consider the full burden on American businesses, jobs and consumers of the proposed tariffs before it makes a decision.
Rick Huether is president and CEO of Independent Can Company in Belcamp, Md. This op-ed first appeared in Fox Business Opinion on www.FoxBusiness.com.
