Trump's Steel and Aluminum Tariffs Could Harm Ports, Consumers

By The Maritime Executive 03-08-2018 06:06:27

The Northwest Seaport Alliance (NWSA), the National Retail Federation and the API have raised concerns about new tariffs on imported steel and aluminum introduced by the Trump administration on Thursday.

The U.S. will levy a 25 percent duty on steel and 10 percent on aluminum, the same level U.S. President Donald Trump promised when he revealed the plan on March 1. The tariffs will take effect in 15 days.

Trump says that steel articles are being imported into the U.S. "in such quantities and under such circumstances as to threaten to impair the national security of the United States." They are weakening the economy and resulting in the persistent threat of further closures of domestic steel production facilities and a shrinking ability to meet national security production requirements in a national emergency

Negative Consequences for Washington State

The Alliance, a joint venture between the ports of Tacoma and Seattle, warns the move could lead to broad negative economic consequences for Washington state. Steel and aluminum imports through the NWSA and Seattle-Tacoma International Airport, operated by the Port of Seattle, exceeded $2.5 billion in value in 2017. Those imports either go directly to Washington-based manufacturers or are processed through logistics services and routed to other destinations in the U.S.

“Higher tariffs will jeopardize jobs in Washington and raise costs for consumers in a much wider range of industries,” said Courtney Gregoire, Port of Seattle commission president and co-chair of the NWSA. “We support vigorous enforcement of fair trade laws and a level playing field, but this reckless approach puts too many people and industries in the economic crosshairs.”

The Potential for Retaliation

“Just as concerning as these blanket tariffs is the potential for retaliatory tariffs on exports of Washington agricultural and manufactured goods,” added Don Meyer, Port of Tacoma commission president and NWSA co-chair. “As a state in which 40 percent of our jobs are tied to international trade, we are risking jobs and quality of life by levying blanket tariffs against some of our most important trading partners and opening the door to their retaliation.”

The NWSA is the second-largest export gateway for overall agricultural and forest products in the U.S. The value of those exports exceeded $6.8 billion in 2016, making up 76 percent of NWSA containerized exports.

“Washington farmers export 80 to 90 percent of their wheat, and so we are deeply reliant on foreign markets to ensure the success of our state’s growers,” said Mike Miller, former chair of the Washington Grain Commission and current chairman of the U.S. Wheat Associates. “Our product is an easy target for retaliatory tariffs, which not only have the potential to reduce sales to overseas partners, but also disrupt long-term relationships that have taken years to cultivate.”

While the potential for retaliatory tariffs from impacted trading partners is unclear, major steel and aluminum importers are also significant Washington trading partners. For example, Canada, Mexico, China and the European Union account for 50 percent of the destinations for exports through the Port of Seattle seaport, 45 percent through Sea-Tac and 37 percent of the destinations through the Port of Tacoma.

Retailers Call Plan “Self-Inflicted Wound”

The National Retail Federation's President and CEO Matthew Shay said: “A tariff is a tax, plain and simple. In this case, it’s an unnecessary tax on every American family and a self-inflicted wound on the nation’s economy. Consumers are just beginning to see more money in their paychecks following tax reform, but those gains will soon be offset by higher prices for products ranging from canned goods to cars to electronics. 

“The retail industry is extremely concerned by the administration’s apparent desire to ignite a trade war, where the net losers will be the very people the president wants to help. On top of steel and aluminum tariffs, retailers are troubled by the direction of the ongoing NAFTA negotiations and the threat of additional tariffs on consumer goods from China. The true greatness of America cannot be realized when we build walls blocking the free flow of commerce in today’s global economy.” 

Tariffs is Inconsistent with U.S. Energy Vision

API President and CEO Jack Gerard today said that the administration’s action on steel tariffs is inconsistent with its vision of a strong U.S. energy and economic future. “We are disappointed by today’s action on steel and aluminum tariffs, and believe it is inconsistent with the administration’s vision on U.S. energy policy and economic growth.

“We remain concerned that implementing tariffs on specialty steel and aluminum, which many U.S. steelmakers do not supply in the quantities and timelines needed for projects could harm America’s energy renaissance and jobs. Steel and aluminum are central to nearly every part of the U.S. energy value chain – from on- and offshore development, to pipelines, refineries, and the local manufacturing facilities that support them.

“We will work with the administration for maximum flexibility and consideration in how today’s proclamation is applied to minimize the impacts to U.S. investment in infrastructure, energy development, and building new facilities for America’s future.”