Jun 01, 2018

New Steel and Aluminum Tariffs to Affect Water and Wastewater Equipment Manufacturing

Trump’s recent imposition of tariffs on Canada, Mexico and the EU will have significant effects on equipment production for the industry

President Trump's new steel and aluminum tariff impositions on Canada, Mexico and the EU will affect water industry equipment manufacturing

On May 31, 2018, President Donald Trump announced plans to impose steel and aluminum import tariffs on Canada, Mexico and the EU in response to supposed abuses of trade by the subject parties. Steel imports will carry a 25% tariff while aluminum will carry a 10% tariff. The new regulations went into effect at midnight the same day as the announcement.

Beyond the tariffs imposed, President Trump will place further regulations on South Korea, Argentina, Australia and Brazil, which will be subject to quotas or volume limits rather than tariffs.

Following the announcement, European Commission President Jean-Claude Juncker announced plans to implement countermeasures to Trump’s tariffs. Mexico also announced planned countermeasures following the announcement.

This new development comes in the midst of several other decisions made by the Trump Administration that have increased the likelihood of trade wars with major countries around the world. On Tuesday May 29, 2018, the White House announced that it would release a list of Chinese goods worth approximately $50 billion that would also be subject to a 25% tariff.

Water & Wastewater Equipment Manufacturer's Assn. Director Vanessa Leiby said the tariffs on aluminum and steel are likely to affect the small to medium members of the association most. Larger manufacturers may have stockpiled materials that are affected by the tariffs and as such will not be as greatly impacted as the small- and medium-sized companies.

As with previous iterations of tariffs this year, understanding the products and companies affected is the critical piece, but as the tariffs change, uncertainty rises. Leiby said that uncertainty makes it difficult for manufacturers to make the best decisions for their businesses because finding appropriate or fixed pricing rates becomes more difficult.