Final Thoughts

The tariffs are already having an impact all over the metals complex. Just look at what our sources are saying about the March scrap trade where a source told me Canadian dealers were trying to “liquidate” material before tariffs came into effect. They didn’t. But they have now. And more could be on the way come April.

Scrap is just one of the areas where even talk of tariffs can move the market, whether it be in ferrous or nonferrous, and all along the supply chain. More nuanced opinions are emerging as businesses start to discover the reality of President Trump’s policies.

Someone who has dealings in both Canada and the US, and is Canadian himself, is Barry Zekelman, executive chairman and CEO, of Chicago-based Zekelman Industries. (He’s also been a featured speaker at many of our conferences and SMU Community Chats).

In an interview with Maria Bartiromo posted on Fox Business on Friday, Zekelman said:

“Steel being a little bit more expensive doesn’t put a huge tax on the economy. It’s the same thing with aluminum. Everyone’s complaining about aluminum prices, but really we’re talking about two and a half cents for a case of beer with can. So I don’t think anybody is against two and a half cents if it promotes domestic manufacturing and domestic jobs. So you have to put all of this in context.”

Well, to that the Can Manufacturers Institute (CMI) might respond: Hold my beer.

In an SMU article on the reactions from US steel trade groups, manufacturing groups, and the United Steelworkers (USW) union, you can see that it’s hardly a united front on Trump’s tariffs.

While CMI said they agree with Trump that something needs to be done about unfair trade practices, they differ on how to do that.

“Aluminum and steel tariffs place price pressures on American-produced goods by artificially and dramatically increasing the cost of critical production materials, making US-made food less competitive against foreign products,” CMI said.

The group points out that US tin mill production is not up to the task of producing enough material to cover the needs of domestic manufacturing. And the tariffs could therefore lead to higher food prices.

Higher food prices are never popular, especially not with politicians (see eggs).

In its release, CMI called on “targeted tariff relief,” which to me seems like a lot of extra hours of work for trade lawyers and US Department of Commerce officials.

Another example, the USW. With members on both side of the Canadian-US border, they were also against Trump’s move, labeling it “Trump’s protectionist charade.” 

Contrast that to broad support for the president’s actions from the Steel Manufacturers Association (SMA) and the American Iron and Steel Institute (AISI).

Though provisions have been made for the new Section 232 tariffs for more downstream products, are we seeing some fissures develop depending on where one is situated along the supply chain?

That is, it’s understandable mills would like higher prices for steel, while further downstream you’d have concerns if you could pass those higher prices on to consumers.

As we all know, this situation is developing day by day. We’ll continue to follow every twist and turn of the tariff saga. But one thing is clear. In my interview with JSW USA CEO Robert Simon recently regarding the state of the industry amid the tariff volatility, I think he put it best: “These are exciting times.”