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Businesses Voice Concerns Over Tariffs Publication info: Dow Jones Institutional News ; New York [New York]31 May 2018.

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Many businesses around the globe expressed alarm Thursday over new U.S. tariffs on steel and aluminum, saying

they will disrupt long-established supply chains, drive up consumer costs and harm U.S. exporters hit with

retaliatory duties.

The Trump administration's tariffs could raise prices on consumer products from beer cans to car parts,

executives said, and inject new unpredictability into manufacturing, agriculture and consumer businesses.

The head of the U.S. Chamber of Commerce, in a memo to the organization's board of directors, said the

administration's overall trade policies, including the possibility of pulling out of the North American Free Trade

Agreement, will hamstring the U.S.'s robust economic growth and threaten as many as 2.6 million U.S. jobs.

Others disagree with the chamber's view and have questioned the analysis behind reports that have criticized the

administration's trade strategy. The White House didn't respond Thursday to a request for comment on the

chamber's memo.

Domestic steelmakers applauded the tariffs. "We thank the president for his actions to ensure a strong American

steel sector that is fundamental to our national and economic security," said Tom Gibson, president of the

American Iron and Steel Institute.

U.S. steelmaker Nucor Corp. said the duties are reducing the flow of cheap foreign steel into the U.S. and allowing

domestic steel companies to increase production as steel prices increase. Nucor Chief Executive John Ferriola

said that the added tariffs are necessary to further reduce steel imports and jump-start U.S. production.

But the prospect of tariffs drew a negative response from manufacturers that import steel and aluminum for their

products. Some said they were concerned about the uncertainty coming from the administration's policy.

"Honestly, the amount of change from Washington is very troublesome," said Rich Goldsbury, president for North

America at Doosan Bobcat Inc., a construction-equipment maker in West Fargo, N.D., that is owned by Doosan

Group of South Korea.

Mr. Goldsbury said higher steel costs could make Bobcat loaders and excavators more expensive to build than

those from rivals in Japan and other countries where steel isn't subject to tariffs. That new threat to business in

the U.S., where Bobcat employs some 3,500 people, has outweighed gains from policies advanced by President

Donald Trump's administration to cut regulation and lower taxes, Mr. Goldsbury said.

"You get a step forward and then you have to take two steps back because of the tariffs," he said.

Kubota Tractor Corp., in Grapevine, Texas, anticipates raising prices for machinery with big steel parts, such as

farming implements and huge wheel rims, by between 2% and 5% as a result of the tariffs, said Todd Stucke, the

company's senior vice president. He and other manufacturing executives said the complexity and unpredictability

of the administration's trade actions are making it hard to plan.

Mr. Trump's administration disputes the business community's views, saying existing trade agreements have led

to chronic deficits that cost U.S. jobs. Administration officials, facing criticism of Mr. Trump's trade policy, have

previously dismissed the business lobby as the "swamp."

Commerce Secretary Wilbur Ross said the current tariffs and planned retaliation against U.S. exports will have a

By Patrick McGroarty and Bob Tita in Chicago and William Mauldin in Washington

small effect on consumer prices, including those on metal products, and a small impact on the U.S. economy.

"The beer, soft drink and soup cans -- it's all a fraction of a penny on each of those," Mr. Ross said Thursday on

CNBC. "In terms of the automobile it's also a fraction of 1 percent, and for the economy overall, it's a very small

fraction of 1 percent."

About half of the raw aluminum imported into the U.S. comes from Canada, where the metal is less expensive to

produce because of its lower-cost electricity generated by hydropower plants.

Pittsburgh-based Alcoa Corp., which operates two aluminum smelters in Canada and is a partner in a third, called

the repeal of the tariff exemptions unfortunate and said duties should not be targeted at countries with market-

economies where aluminum is fairly traded.

Alcoa and the industry's trade group, Aluminum Association, said Thursday's action failed to address the industry's

biggest problem: overcapacity to make aluminum in China. They said the glut has flooded the world market and

dragged down prices for aluminum products.

Aluminum industry analysts, however, said prices for the metal already reflect the tariffs, including imports from

Canada and the EU.

The Beer Institute, a trade association representing brewers in the U.S., said the tariffs would make producing

aluminum cans more expensive and less predictable. About 70% of aluminum beverage cans in the U.S. are made

from recycled aluminum, but aluminum prices have risen overall this year as the administration has threatened

and implemented various tariffs on foreign producers.

"Industries thrive when there is predictability and accountability in the metals market," said Jim McGreevy, the

trade group's president and chief executive.

Some of the strongest objections came from the agriculture sector, where the tariffs will "take many American

farm operations to the breaking point," said Brian Kuehl, executive director of Farmers for Free Trade, a nonprofit.

"American farmers overwhelmingly supported President Trump in 2016 but will not be silent in the face of trade

wars that harm U.S. agriculture."

Businesses in Europe said they saw potentially lasting damage to an already strained European Union-U.S.

relationship.

"The U.K. government must reach out to and support the many supply-chain businesses that face becoming the

'collateral damage' of the Trump administration's protectionist push," said Adam Marshall, the British Chambers of

Commerce director general. "British ministers must also work hand in hand with the EU to avoid any further

escalation, and to find a long-term solution."

Susan Danger, CEO of the American Chamber of Commerce to the EU, said: "We are very concerned by the damage

a tit-for-tat dispute would cause to the trans-Atlantic economy and its impact on jobs, investment and security

across the Atlantic."

The U.S. Chamber cites studies saying hundreds of thousands of jobs could be lost due to the administration's

tariff plans on metals, Chinese goods and the auto industry. The Business Roundtable, another business group,

estimates that 1.8 million American jobs could be lost in the first year if Mr. Trump follows through with warnings

about exiting Nafta.

Economists warn the measures could generate significant losses, and U.S. stocks fell on the news Thursday.

--Daniel Michaels in Brussels and Nina Trentmann in London contributed to this article.

Write to Patrick McGroarty at patrick.mcgroarty@wsj.com, Bob Tita at robert.tita@wsj.com and William Mauldin at

william.mauldin@wsj.com

(END)

May 31, 2018 19:05 ET (23:05 GMT)

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Subject: North American Free Trade Agreement; Manufacturing; Aluminum; Presidents; US

exports; Beer; Agriculture; International trade; Farmers; Tariffs; Chambers of

commerce; Free trade; Steel industry

Location: Pittsburgh Pennsylvania Chicago Illinois Canada North America United Kingdom--UK

Europe South Korea Texas United States--US China Japan

People: Trump, Donald J Ross, Wilbur L Jr Ferriola, John

Company / organization: Name: Doosan Group; NAICS: 332410; Name: Nucor Corp; NAICS: 325180, 331110,

332312; Name: Kubota Tractor Corp; NAICS: 333111; Name: Beer Institute; NAICS:

813910; Name: American Chamber of Commerce; NAICS: 813910; Name: Business

Roundtable; NAICS: 813910; Name: Aluminum Association; NAICS: 813910; Name:

European Union; NAICS: 926110, 928120; Name: US Chamber of Commerce; NAICS:

813910

Publication title: Dow Jones Institutional News; New York

Publication year: 2018

Publication date: May 31, 2018

Publisher: Dow Jones &Company Inc

Place of publication: New York

Country of publication: United States, New York

Publication subject: Business And Economics

Source type: Wire Feeds

Language of publication: English

Document type: News

ProQuest document ID: 2047667898

Document URL: https://login.dist.lib.usu.edu/login?url=https://search.proquest.com/docview/20476

67898?accountid=14761

Copyright: Copyright Dow Jones &Company Inc May 31, 2018

Last updated: 2018-06-01

Database: Global Newsstream

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