Michigan ranks among the top four importers nationally of steel and aluminum, which means business and consumers will see price increases.
If Google search is any indication, President Donald Trump has inspired curiosity.
More than 600 million Google searches have asked what’s made from aluminum and steel after Trump announced new tariffs Thursday. A few million more ask which states import these metals.
Michigan is the No. 4 state as an importer, behind Texas, California and Illinois.
Aluminum is used for everything from beer and soda cans to foil, baseball bats, bike frames, nails, golf clubs, patio furniture, pots and pans, home siding and staples. It is essential in the aerospace industry.
“An immediate tariff of 10% on aluminum wheels with no available capacity in the U. S. is one of the dumbest policy moves you can make. Capacity has been reduced in the U. S. for years. Superior Industries has closed plants” in Tennessee, Kansas, California and Arkansas, tweeted Dave Sullivan, manager of product analysis at AutoPacific, Inc.
Steel is used to make automobiles, military tanks, medical devices and implants, stoves, refrigerators, washing machines, dishwashers, forks, spoons and large knives.
Not all steel is the same. Steel has different levels of quality, hardness and breakage under tension (known as tensil strength) and that can affect wear resistance, ease of welding and how the material is cut, known as machinability.
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It all depends on the type of iron ore used, impurities removed and carbon content added in a complicated chemistry exercise.
The Great Lakes State imported $2 billion worth of steel and $764 million worth of aluminum last year. More than 200,000 Michigan jobs are tied to the automotive and metalworking industry.
Combining aluminum and steel, when measured by total volume, Texas, California, Illinois, Michigan, Louisiana, Pennsylvania, Ohio and New York each import more than $2 billion annually, together accounting for 60% of the nation’s total, according to the Brookings Institution.
Motor City businesses will need to brace themselves.
«If you’re a company that uses steel, your costs just went up,» said Charles Ballard, an economics professor at Michigan State University. «A lot of hardware you find at Lowe’s or Home Depot will go up in price if steel goes up.»
The tariffs’ impact on regular people is very real, he said.
«This will be viewed correctly as a hostile move by us,» Ballard said of the tariffs’ likely reception internationally. «If someone punches you in the face, you don’t say, ‘Thanks, that’s very nice.’ You usually hit back.»
Economists, in general, have voiced concern about Trump’s 25% steel tariff and 10% aluminum tariff on imports from countries other than Canada and Mexico.
«Remember, a tariff is a tax on imports,» Ballard said. «The same administration that gleefully pushed a tax cut is pushing a tax increase. That’s irony.»
Molly Shutt, a senior commodities analyst with BMI Research, considers tariffs on imported steel and aluminium to be «ultimately detrimental to economic growth.»
The U. S. consumes significantly more steel and aluminium than it produces, so imports are necessary to meet demand, she said.
«Particularly in the case of aluminium, where domestic production would account for only around 12% of consumption. Implementing tariffs on steel and aluminium imports will raise prices domestically thus helping U. S. producers, however metal imports will still be needed and just cost more, impacting the industries mentioned above negatively.»
Ford Motor said in January 2018, prior to the president’s discussion of tariffs, that the higher cost of steel and aluminum were hurting the bottom line and could impact profits in 2018.
A Goldman Sachs analysis suggested a steel tariff could cost Ford and General Motors each $1 billion a year.
Contact Phoebe Wall Howard: 313-222-6512 or phoward@freepress.com. Follow her on Twitter: @phoebesaid.
