(Francisco Kjolseth | The Salt Lake Tribune) Crews work on a large drying tower bound for a gold mine in Nevada at Structural Steel and Plate Fabrication in North Salt Lake on Friday, Dec. 28, 2018. Recent metal tariffs implemented by the Trump administration though a boom for steel producers has negatively impacted metal fabrication businesses creating numerous challenges.
While many Utah manufacturers have struggled with President Donald Trump’s tariffs on metal imports, one northern Utah steelmaker is not complaining.
Nucor Steel, with a plant in Plymouth, near the Idaho state line, has seen its profitability skyrocket as a result of tariffs, which have made domestically produced metals more competitive.
“Many of our foreign competitors are violating international trade agreements by subsidizing their steel industries or, in the case of China, having the government own the country’s major steel producers,” said Katherine Miller, spokeswoman for Nucor, the nation’s largest steel producer. The metal tariffs having created a level playing field for U.S. steel, she said.
“We have advocated for years that a broader, more comprehensive approach was needed to combat steel dumping,” Miller continued. “Through the first nine months of 2018, finished steel imports are down 12.3 percent.”
Nucor and steel suppliers like them have successfully, and profitably, stepped in to fill the void of foreign steel supply.
Nucor Steel produces a wide range of products from structural steel beams, to steel rods and sheet metal. The uses of its steel range from complex oil pipeline flow regulation to simply bolting things together.
The Nucor Steel plant in Plymouth employs just over 450 people. Yet, despite Trump’s tariffs on steel having created big profits for steelmakers like Nucor Corp., few new jobs have been created.
Meanwhile, metal fabrication businesses are seeing a different tariff picture.
“It has caused more work on our part because material availability went down, or there were concerns of no availability,” said Brandon Sortor, director of business development at Structural Steel and Plate Fabrication in North Salt Lake. “Certain fabricators were trying to stockpile material before the tariffs went into effect, which caused a short-term panic over shortages. Certain materials were hard to come by, and we ended up paying a premium.”
The challenges are playing out both nationally and locally, said Miles Hansen, president and CEO of World Trade Center Utah. “Utah is similar to the U.S. at large in that there is an uneven impact on businesses. Nucor is producing steel, so, with the tariffs in place, they are benefiting. The tariffs have had a positive impact for producers. On the other hand, fabricators of steel are losing. The acquisition of steel is several months out, which makes planning for those businesses difficult.”
Hansen explained that some companies have found success avoiding the tariffs by negotiating their way through the different import and export codes to their advantage, Hansen said. “Those companies are very active in working on minimizing the tariffs, but the time and energy in developing these strategies are costly. Even so, eventually no one will be able to avoid the costs of the tariffs.”
Ultimately, it is the end user who will pay the price. For fabrication businesses like Structural Steel, the consequences of the metal tariffs are readily apparent. Sortor said, “Because of the tariffs, customers may choose to not move forward, or delay fabrication, in hopes the tariffs will ease or eventually go away.”
In September, the cost of a wastewater treatment plant for seven Cache County cities went up by $25 million, in part because of these tariffs. And concerns about rising costs have worried builders throughout the state, and politicians. Utah’s members of Congress have opposed the tariffs.
Hansen, with the World Trade Center Utah, pointed out that despite the appearance that trade negotiations with China are stuck, with this administration, breakthroughs often happen when things look the worst.
“Think back to tensions with North Korea last year, the E.U. [European Union] this summer and Canada this fall. Despite the escalating tensions right now, I’m optimistic that both sides will get together to reach a deal that addresses some of our concerns and ends the tariffs," Hansen said. "Just like we found with many U.S. banks during the financial crisis, the U.S.-China trade relationship is simply too big to fail.”