Trump steel and aluminum tariffs take a toll on Vermont manufacturers
Tariff trouble has been a long time coming for a number of Vermont companies.
President Donald Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum imports in May from both Canada and Mexico. Yet many Vermont businesses had already been feeling the pain for months, the owner of Queen City Steel Co. in Burlington says.
The firm's suppliers started raising their prices in November 2017, owner Jeff Goldfield said. That's when rumors of tariffs began circulating, six months before any tariffs went into effect.
“It wasn’t just a little bit,” Goldfield said of the price increases. “Every month, they were hitting it. Once in November, once in December, once in January.”
The result for Queen City Steel, which supplies raw steel to fabricators and builders, is this: A truckload of steel that cost up to $10,000 before the tariffs now costs upwards of $30,000.
The company is hardly alone in Vermont. Gov. Phil Scott, a Republican, said tariffs serve only to slow the economy down.
“I feel as though we have a heated-up economy and we don’t want to do anything to squelch that,” Scott said at the 2018 New England Governors and Eastern Canadian Premiers conference in Stowe last month. “Fear, at least apprehension, leads to sitting on your hands. I’m concerned, and I think a lot of businesses throughout Vermont are apprehensive.”
Colchester casting machine company frets tariffs
One business feeling apprehensive about the tariffs is Hazelett Corp. in Colchester, a manufacturer with 160 employees that exports globally to about 24 countries, including China. It is
among Vermont's largest manufacturers.
Hazelett makes continuous casting machines that are used to manufacture rolls of aluminum and copper from molten metal, as well as copper bar and strips of zinc and lead. The machines weigh up to 150 tons and can cost as much as $20 million each.
About one-third of the copper wire produced in the world goes through Hazelett Corp. bar casters, said David Hazelett, whose grandfather founded the company in Cleveland a century ago. The firm has 40 to 50 customers around the world, according to Marketing Director Keith Decker, including one of the world’s largest manufacturer of car batteries located in China.
So the stakes are high for one of Vermont’s largest manufacturers, especially where the Chinese market is concerned. After Trump imposed tariffs, the Chinese government has retaliated with their own
tariffs that his company must pay.
“Virtually all of our spare parts we sell to China, which represents about 20 percent of our ongoing business, are subject to a 10 to 25 percent tariff," Hazelett said. "And we struggle anyway to maintain our customers in China."
Hazelett Corp. is affected by the Trump Administration’s tariffs in a variety of ways. The primary source for the steel used to make the casting belts on the Hazelett Corp. continuous casting machine is in France.
“We’re now paying a 25 percent duty on all that material,” Hazelett said.
Tariff on Canadian aluminum takes toll
The aluminum tariff has hit Hazelett even harder because aluminum is such an important part of its business.
“The tariffs have brought a lot of shocks, but the biggest one and worst one is this 10 percent tariff against Canadian aluminum,” David Hazelett said. “It’s
a tax on American costs that nobody else bears, only the United States.
The United States consumes about 12 million tons of aluminum annually and produces less than four tons, Hazelett said.
“So we rely on a couple of things,” he said. “One is a lot of scrap aluminum. We have the biggest scrap aluminum market in the world.”
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Originally Posted by Swordsmyth
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