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Released March 05, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. President Donald Trump doubled down in defending his decision Thursday to slap a 25% tariff on steel imports and 10% tariff on aluminum--a decision that sent markets tumbling toward the end of last week, drew praise from the domestic steel industry, and raised the ire of foreign governments, domestic manufacturers and some members of the president's own party. Industrial Info is tracking about $15.4 billion in active projects at steel mills across the U.S., including $9.2 billion that are set to begin or end construction this year.
Trump announced his decision at a news conference Thursday that was attended by 15 executives from the steel and aluminum industry. The tariffs were among several proposals presented to Trump by the U.S. Department of Commerce as part of a Section 232 investigation into whether high imports were a national security threat. Trump said the tariffs would be implemented for an indefinite period, with no exemptions to North American Free Trade Agreement (NAFTA) countries or other countries. For more information, see March 2, 2018, article - Trump to Order Steel & Aluminum Tariffs Next Week.
Among the strongest supporters of Trump's decision is John Ferriola, the chief executive officer of Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina), who attended Thursday's meeting. The administration, Ferriola said in a statement, "was correct in concluding that surging imports impair our national security by limiting the ability of our domestic steel industry to supply national defense and critical infrastructure needs, and the president is taking the appropriate response to this threat."
Industrial Info is tracking $1.65 billion in active projects from Nucor, including the proposed construction to two "micro mills" in states that supported Trump in the 2016 U.S. presidential election: a $250 million rebar mill in Sedalia, Missouri, and a $227 million rebar mill in Florida, which are expected to produce 350,000 and 400,000 tons per year, respectively.
Nucor is at work on two other projects at existing facilities: the $180 million expansion of the Kankakee Steel Mill in Bourbonnais, Illinois, and the $176 million in additions at the Gallatin Thin Slab Steel Mill in Ghent, Kentucky. The Kankakee Steel Mill's capacity will be expanded to 500,000 tons per year, while the Gallatin facility will see a new, 500,000-ton-per-year galvanizing line to expand production for the automotive industry. For more information, see Industrial Info's project reports on the Missouri rebar mill, Florida rebar mill, Illinois expansion and Kentucky additions.
Among the other steel producers that supported Trump's decision were AK Steel Corporation (NYSE:AKS) and United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania), which, along with Nucor, were among those who harshly criticized China's trade policies for steel. The companies said China circumvented laws by effectively exporting cheap steel (or "dumping") to the U.S. by way of Vietnam. For more information, see December 7, 2017, article - U.S. Slams Steel Imports from Vietnam that Started in China.
But many other industries are unhappy with Trump's decision, and their executives are warning that a resulting "trade war" could have negative--even catastrophic--consequences for the economy. The Association of Oil Pipe Lines (AOPL) issued a statement supporting Trump's "overall objective," but noted that domestic companies have largely exited the pipeline-grade steel business, "because of its small market, higher costs, and lower margins." Pipeline-grade steel only amounts to 3% of the total steel market, and is a specialty product that must meet high-quality specifications not required for other steel products. Most of the steel provided comes from foreign-based producers. Industrial Info is tracking $66 billion in active Oil & Gas Pipeline projects in the U.S., including $43.5 billion that are set to begin or finish construction this year.
The American Petroleum Institute (API) issued a statement calling the tariffs "inconsistent with the Administration's efforts to bolster the U.S. economy."
Other manufacturers are wary as well. Electrolux Home Products (Charlotte, North Carolina), a subsidiary of Electrolux Group (Stockholm, Sweden), is putting on hold a planned, $250 million expansion of a cooking equipment-manufacturing factory in Springfield, Tennessee, as it weighs the potential effects of the tariffs. Construction on the facility, which would have totaled 400,000 square feet and featured a new line of Frigidaire freestanding cooking products, was set to begin later this year.
"Unfortunately, this tariff decision gives foreign appliance manufacturers a cost advantage that is hard to compete against," the company said Friday in a statement quoted by The Charlotte Observer. "We are evaluating the decision and are concerned enough about the negative financial impact that we are putting our $250 million Tennessee expansion on hold until the order is signed and final details are understood." For more information, see Industrial Info's project report.
U.S. Commerce Secretary Wilbur Ross, a longtime critic of trade practices from China and other countries that export to the U.S., told CNBC that the move would have a "broad" but "trivial" impact on prices: "This is not the first time we put tariffs on steel. We have tariffs on many forms of steel. The reason why we've had to go this route is they don't solve the problem of overcapacity in global dumping."
Ross was responding, in part, to criticism from Campbell Soup Company (NYSE:CPB) (Camden, New Jersey), which had earlier issued a statement warning that tariffs could lead to higher prices for products that incorporate tin and aluminum--like soup cans: "Any new broad based tariffs on imported tin plate steel -- an insufficient amount of which is produced in the U.S. -- will result in higher prices on one of the safest and more affordable parts of the food supply."
Campbell Soup has two major projects under construction in states that supported Trump in the 2016 U.S. presidential election: a $44 million distribution center in Findlay, Ohio, and a $40.5 million distribution center in Charlotte, North Carolina. The facilities are expected to total 740,000 and 627,000 square feet, respectively, with the Ohio facility set to wrap up this spring. For more information, see Industrial Info's reports on the Ohio and North Carolina projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Trump announced his decision at a news conference Thursday that was attended by 15 executives from the steel and aluminum industry. The tariffs were among several proposals presented to Trump by the U.S. Department of Commerce as part of a Section 232 investigation into whether high imports were a national security threat. Trump said the tariffs would be implemented for an indefinite period, with no exemptions to North American Free Trade Agreement (NAFTA) countries or other countries. For more information, see March 2, 2018, article - Trump to Order Steel & Aluminum Tariffs Next Week.
Among the strongest supporters of Trump's decision is John Ferriola, the chief executive officer of Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina), who attended Thursday's meeting. The administration, Ferriola said in a statement, "was correct in concluding that surging imports impair our national security by limiting the ability of our domestic steel industry to supply national defense and critical infrastructure needs, and the president is taking the appropriate response to this threat."
Industrial Info is tracking $1.65 billion in active projects from Nucor, including the proposed construction to two "micro mills" in states that supported Trump in the 2016 U.S. presidential election: a $250 million rebar mill in Sedalia, Missouri, and a $227 million rebar mill in Florida, which are expected to produce 350,000 and 400,000 tons per year, respectively.
Nucor is at work on two other projects at existing facilities: the $180 million expansion of the Kankakee Steel Mill in Bourbonnais, Illinois, and the $176 million in additions at the Gallatin Thin Slab Steel Mill in Ghent, Kentucky. The Kankakee Steel Mill's capacity will be expanded to 500,000 tons per year, while the Gallatin facility will see a new, 500,000-ton-per-year galvanizing line to expand production for the automotive industry. For more information, see Industrial Info's project reports on the Missouri rebar mill, Florida rebar mill, Illinois expansion and Kentucky additions.
Among the other steel producers that supported Trump's decision were AK Steel Corporation (NYSE:AKS) and United States Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania), which, along with Nucor, were among those who harshly criticized China's trade policies for steel. The companies said China circumvented laws by effectively exporting cheap steel (or "dumping") to the U.S. by way of Vietnam. For more information, see December 7, 2017, article - U.S. Slams Steel Imports from Vietnam that Started in China.
But many other industries are unhappy with Trump's decision, and their executives are warning that a resulting "trade war" could have negative--even catastrophic--consequences for the economy. The Association of Oil Pipe Lines (AOPL) issued a statement supporting Trump's "overall objective," but noted that domestic companies have largely exited the pipeline-grade steel business, "because of its small market, higher costs, and lower margins." Pipeline-grade steel only amounts to 3% of the total steel market, and is a specialty product that must meet high-quality specifications not required for other steel products. Most of the steel provided comes from foreign-based producers. Industrial Info is tracking $66 billion in active Oil & Gas Pipeline projects in the U.S., including $43.5 billion that are set to begin or finish construction this year.
The American Petroleum Institute (API) issued a statement calling the tariffs "inconsistent with the Administration's efforts to bolster the U.S. economy."
Other manufacturers are wary as well. Electrolux Home Products (Charlotte, North Carolina), a subsidiary of Electrolux Group (Stockholm, Sweden), is putting on hold a planned, $250 million expansion of a cooking equipment-manufacturing factory in Springfield, Tennessee, as it weighs the potential effects of the tariffs. Construction on the facility, which would have totaled 400,000 square feet and featured a new line of Frigidaire freestanding cooking products, was set to begin later this year.
"Unfortunately, this tariff decision gives foreign appliance manufacturers a cost advantage that is hard to compete against," the company said Friday in a statement quoted by The Charlotte Observer. "We are evaluating the decision and are concerned enough about the negative financial impact that we are putting our $250 million Tennessee expansion on hold until the order is signed and final details are understood." For more information, see Industrial Info's project report.
U.S. Commerce Secretary Wilbur Ross, a longtime critic of trade practices from China and other countries that export to the U.S., told CNBC that the move would have a "broad" but "trivial" impact on prices: "This is not the first time we put tariffs on steel. We have tariffs on many forms of steel. The reason why we've had to go this route is they don't solve the problem of overcapacity in global dumping."
Ross was responding, in part, to criticism from Campbell Soup Company (NYSE:CPB) (Camden, New Jersey), which had earlier issued a statement warning that tariffs could lead to higher prices for products that incorporate tin and aluminum--like soup cans: "Any new broad based tariffs on imported tin plate steel -- an insufficient amount of which is produced in the U.S. -- will result in higher prices on one of the safest and more affordable parts of the food supply."
Campbell Soup has two major projects under construction in states that supported Trump in the 2016 U.S. presidential election: a $44 million distribution center in Findlay, Ohio, and a $40.5 million distribution center in Charlotte, North Carolina. The facilities are expected to total 740,000 and 627,000 square feet, respectively, with the Ohio facility set to wrap up this spring. For more information, see Industrial Info's reports on the Ohio and North Carolina projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
