As trump’s tariffs bite, small u.s. manufacturers begin to tap the brakes metro us gas efficient cars under 10000


That plan now is shelved, Haberman said, because the cost of steel used in Gradall’s telescopic excavators and vacuum trucks shot up by one-third following President Donald Trump’s crackdown on steel imports. As steel costs account for 35 percent of his cost of production, he fears rising prices would not only hurt his export sales, but also give an edge to foreign rivals at home.

But Reuters interviews with more than a dozen small to mid-sized manufacturing executives and recent U.S. economic data reveal Trump’s protectionist trade policy is starting to lead some of them to take a more cautious approach, and forcing them to put new investment and hiring plans on hold.

While these manufacturers lauded the administration’s push to make U.S. businesses globally competitive through measures such as the tax overhaul and a deregulation drive, they complained that the steel and aluminum tariffs along with the escalating trade spat with China were undercutting those benefits.

Trump has proposed a separate 25 percent import tariff on some 1,300 Chinese products to try to force changes in Beijing’s intellectual property practices. If the tariff comes into effect, they would upend Haberman’s components supplies from China, he said.

The steel and aluminum import tariffs imposed in March were designed to protect the American industries and its workers from global overcapacity and unfair trade practices. Trump justified the measure saying protecting the industries was important to the country’s national security. He argued that the tariffs would re-open closed mills, sustain a skilled workforce, and maintain or increase production.

But the tariffs, which came into effect on March 23, have driven up raw material costs and caused supply delays, rendering the manufacturers’ "Made in the USA" products uncompetitive against their foreign rivals, according to these manufacturing company executives.

The Institute for Supply Management (ISM) survey on Tuesday showed how widespread that sentiment is: manufacturers slowed down hiring for a second straight month in April amid complaints that the tariffs have brought business planning to a standstill.

Nicole Sahin, chief executive at recruitment firm Globalization Partners in Boston, says a large multi-national client of hers recently pulled back from an $800 million investment in a U.S.-based energy project after rising steel costs made the investment not viable.

In a March study, Trade Partnership Worldwide, LLC estimated the steel and aluminum tariffs would result in a net loss of nearly 470,000 U.S. jobs. The proposed tariffs on Chinese imports, the Washington-based consulting firm estimates, would put 134,000 jobs at risk.

While the tariffs have increased the demand for local steel and aluminum, domestic mills have not yet fully ramped up their capacity. Data from the American Iron and Steel Institute shows capacity utilization at the steel mills has gone up by just 1.1 percentage points from the same period last year.

Trump has postponed a decision on whether to withdraw temporary exemptions from the metals tariffs on Canada, the European Union and Mexico until June 1, and has reached agreements for permanent exemptions for Argentina, Australia and Brazil.

The company’s chief financial officer, Steve Heun, says the tariffs, including the latest countervailing duties, will make its aluminum products at least 20 percent more expensive than those of its foreign rivals, and are estimated to increase its input costs by as much as $6 million a year.