On January 24, 2020 another executive order was issued.
Um, you need to know about this one. Here’s the title: “Proclamation on Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles into the United States.” Remember that word – “derivatives.”
Let’s look back a bit to a previous proclamation:
“In Proclamation 9704 of March 8, 2018…and Proclamation 9705 of March 8, 2018…I concurred in the Secretary’s findings that aluminum articles and steel articles were being imported in the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.”
I think we all know the result of these tariffs: price increases on steel and aluminum products along with disruption and in some cases, job loss.
Back to January 24.
The Commerce Department and the current Administration has been keeping track of the results of these tariffs and while they note that imports of steel and aluminum articles have decreased and capacity to manufacture these articles domestically have improved, it’s not enough. And, “…the Secretary has informed me that imports of certain derivatives of aluminum articles and imports of certain derivatives of steel articles have significantly increased.” The solution? A 10% tariff on aluminum derivatives and a 25% tariff on steel derivatives.
I leave it up to you to run a mental inventory of all the stuff you use on your job site or in your manufacturing plant that is derived from aluminum and/or steel and what’s coming next.
And, there’s more.
There’s an anti-dumping lawsuit out there that is going to affect everyone who manufactures, and uses, medium and heavy gauge staples. Kyocera (Senco) filed an anti-dumping lawsuit against China, Korea, and Taiwan. On January 6, the Department of Commerce imposed an antidumping duty of 301.64% (that’s not a typo) on all imports of medium and heavy gauge collated steel staples from China.
Well, first, in this context, cows aren’t holy but yes, wow. Think about all the manufacturers who have facilities in China. They are all scrambling. You might think, “good, they deserve it!”, but stop for a moment and picture the impact on the supply chain. It’s huge. But that’s another blog post.
So, what does this mean for Hartman as a distributor and for our suppliers? Well, first, we have a full warehouse of aluminum and steel “articles” and “derivatives.” In addition, our suppliers also have warehouses full of aluminum and steel “articles” and “derivatives.” Can we keep our prices the same? No, not really. Will there be some disruption in the market? Probably. Our suppliers have contacted us with assurances that they will take care of us which means we can also take care of you so you can keep your project going – whether it’s a construction site, a pallet shop, or an industrial facility.
In the meantime, if you don’t know your congressional representative, this might be a good time to learn their name.