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Tariffs

Steel Tariffs Weigh on US Manufacturer Amid US-China Trade Tensions

Strategic Insights

— 1 min read

As the US swelters through a scorching summer, metal containers adorned with festive winter imagery are taking shape at Independent Can's factory in Belcamp, Maryland. However, the company's CEO, Rick Huether, is grappling with the effects of President Donald Trump's steep steel tariffs. Huether, 73, has been running the family business since age 14 and is determined to keep it afloat for generations to come. However, Trump's tariffs of 25% on imported steel and aluminum, later doubled to 50%, are complicating this task.

Key Takeaways:

  • Independent Can's CEO, Rick Huether, believes the company will have to raise prices by more than 20% due to the 50% steel tariffs.
  • The company currently relies on imported steel for 70% of its needs, as only 25% of the required tinplate is produced domestically.
  • Huether is concerned about Trump's methods, citing the presidential administration's history of imposing tariffs and then backing off or postponing them.
  • Independent Can employs nearly 400 people at four sites but has avoided layoffs for now.
  • However, one of the company's plants in Iowa closed last year due in part to a previous increase in steel tariffs.
  • Buyers have already reduced their orders this year by 20 to 25% due to economic concerns and uncertainty about the steel tariffs.
  • Some buyers seem inclined to buy American products, but Huether is skeptical about the longevity of this trend, referencing his company's experiences during the Covid-19 crisis.

Statistics:

  • 25%: The percentage of tinplate required for US manufacturing that is currently produced domestically.
  • 70%: The percentage of steel that Independent Can needs to import from outside the US.
  • 20%: The expected price increase Independent Can will have to implement over the steel tariffs.
  • 50%: The increase in business during the Covid-19 pandemic.
  • 20-25%: The reduction in buyer orders this year due to economic concerns and uncertainty about steel tariffs.

Sources:

  • AFP, no publication date or timestamp

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