By CAROLINE BECK, Alabama Daily News
Auto manufacturers, farmers and the head of Alabama’s Port Authority told Sen. Doug Jones Monday that trade tariffs imposed by the Trump Administration are harming their industries, while steel manufacturers told him the tariffs were leveling the playing field.
Jones organized a roundtable discussion in Mobile with stakeholders including auto manufacturers, farmers, steel producers, and the Alabama Port Authority to discuss how recently-implemented tariffs are impacting different businesses in Alabama. The roundtable was done on behalf of the Senate Homeland Security and Governmental Affairs Committee, of which Jones is a member.
Mark Kaiser, who farms soybeans, cotton and peanuts in Seminole, Alabama, China is is largest customer and the trade war has his soybean exports down 98 percent.
Daniel Perry also farms soybeans, peanuts and sweet potatoes on his fourth generation family farm. He said constraints on Alabama farms are a matter of national security just as much as the procurement of steel and auto parts is. Perry noted that the food he produces can directly affect the well being of Alabamians as well as the nation if people are not able to be fed.
“We need steel in this country to fight wars and make whatever we need to make in this country, but good luck eating it,” Perry said.
What has jolted farmers and manufacturers alike is the rate of change.
Allyson Edwards, the assistant division manager for Honda Manufacturing in Alabama, told Jones that the possibility of future change in trade policies is “unsettling for those in our industry who make decisions about future investments,” and that added risk makes it harder to recruit more companies to bring their business to the U.S.
“To be clear, barriers to trade should be removed everywhere. But imposing tariffs here will put American workers, American consumers, American communities, and the American economy at risk,” Edwards said.
Two representatives from the steel industry, however, noted how the tariffs on foreign steel imports are actually helping their industry by now making steel prices return to a fair market price.
“Our industry has endured years of unfair trade” as foreign producers were allowed to dump steel on the American market at unfair prices, said Mike Lee, Vice President and General Manager of Nucor Steel in Decatur, Alabama.
Brent Sansing, the plant manager for U.S. Steel’s Fairfield Works tubular production, also had favorable things to say about the tariffs and also put the situation into perspective when he recalled about what happened to the US steel industry in 2015.
“In 2015 the difficult decision was made to permanently shut down the Fairfield blast furnace,” Sansing said.
“For the first time since 1907, the melting and making of raw steel went completely cold in Fairfield … Construction of an electric arc furnace was placed on hold. In tubular operations alone, over 2,000 employees were laid off and over 50 percent of our tubular facilities were closed. This is the context in which President Trump’s action should be measured.”
“US steel can compete with anyone in the world on a level playing field. But it’s been a long time since we’ve seen a level playing field. And folks today are saying they’re concerned about what might happen to their business, but I can tell you what has happened to our business,” Sansing said towards the automakers on the panel.
Sansing and Jones actually have a shared history in the steel industry, with both working from an early age in a steel manufacturing plant in Alabama and Jones said that because of this personal link to steel, he especially understands the importance of such an industry in helping support middle-class America.
“I know the global impacts of the trade wars on the steel industry and how illegally subsidized steel has hurt my city and my state and has hurt this country. Having a strong steel industry is a national security concern. And we can’t stand idly by,” Jones said.
In June, Jones joined and Sen. Lamar Alexander (R-Tenn.) in sending a letter to U.S. Department of Commerce Secretary Wilbur Ross to urge him to reconsider the 25-percent auto tariffs, pointing to the damage it would do to their respective states’ economies. The Senators then cosponsored bipartisan legislation to delay the auto tariffs until completion of a study to examine the impacts these tariffs would have on the automotive industry. Jones also joined Sens. Rob Portman (R-Ohio) and Joni Ernst (R-Iowa) to introduce legislation requiring that the Department of Defense, and not the Department of Commerce, justify the national security basis for new tariffs under Section 232.
One other industry that hasn’t been widely considered in the steel tariff debacle is the transportation business, specifically the Mobile Port Authority, which takes care of Alabama’s only seaport. Jimmy Lyons, the Director & CEO of the Alabama State Port Authority was there to speak on how the trade tariffs could devastate the imports and exports in the port, but also the everyday Alabamians who count on those jobs.
“You can call them tariffs, but they are taxes. These tariffs and taxes are eventually going to fall on the shoulders of the American people,” Lyons said.
Graham Jones of Aker Solutions, which helps provide subsea-umbilicals for offshore oil drilling, said the energy industry is facing huge increases in expenses due to the steel tariffs. One project has about a 1,942 percent increase in the amount paid in tariffs from previous years due to the special kind of steel that is required for their job that is only available in foreign countries.
Graham Jones has explained that even though Aker Solutions had applied for a tariff abstention, the application process was often not very straightforward. With no timeline given to when the tariff could end or their application accepted, their company is not able to continue financial planning for the future.
The automakers and manufacturers of Alabama also wanted to firmly dispel the notion that their companies are somehow a threat to national security just because they want to fight these tariffs that are hurting their business.
“Now we hear about import tariffs on vehicles and auto parts and the idea that our imports are a national security threat. Personally, that’s very frustrating,” said David Fernandes, president of Toyota Motor Manufacturing plant in Huntsville, Alabama.
“The idea that 137,000 hard-working Americans in our facilities, our supplier network, and at our dealers across the country could be considered a national threat? That’s impossible.”
The quick change in the supply chain that these tariffs are imposing on automakers is hurting the various auto manufacturing plants in Alabama and the changes in cost just cannot be absorbed by companies like the Mercedes Benz plant.
Rick Clementz, the general counsel for Mercedes Benz U.S. International told Jones that it’s about a 10-year cycle to make a new vehicle. So quick changes are not easy for them to adjust to just like people in the steel industry are suggesting it is.
Robert Burns, the Vice President of Human Resources & Administration at Hyundai Motor in Alabama told the panel that Hyundai would love to use more steel made in the U.S., but that’s a very long process that takes a while, and their companies also need to understand the new rules of the US-MCA trade agreement with Canada and Mexico, the successor to NAFTA, that still hasn’t even been ratified.