Jun 4, 2018
Steel producer says U.S. customers already putting orders on hold amid tariffs
One Alberta steel producer says he’s already receiving phone calls from U.S. customers to hold orders amid U.S. President Donald Trump’s recent metals tariffs.
“It’s pretty soon in this process to tell if we are going to have to lay off anybody yet. But I’ve already been receiving some phone calls [from] people putting orders on hold,” Neil Rasmussen, president of Bri-Steel Manufacturing, told BNN Bloomberg in an interview Monday.
Rasmussen, whose company manufactures and distributes large-diameter seamless steel pipe and employs 53 people in its Edmonton factory, said Trump is picking the “wrong commodity to target.”
“I understand his bigger picture that he’s trying to accomplish, but I think the fact that traditionally we’re a much larger buyer than we are seller to their country in steel products that this is only going to hurt them in the long run.”
“We’re anticipating that some conversations are going to happen this week at the G7,” he added, in reference to the leaders’ summit in Charlevoix, Que. “Hopefully we can figure out a way to maintain the business and hold onto it.”
The Trump administration slapped 10 per cent tariffs on Canadian aluminum and 25 per cent tariffs on steel imports last week, triggering a trade war as the Canadian government fired back with its own $16.6-billion in countermeasures.
“I think it would have been the wrong move to just to stand pat,” Rasmussen said of the Canadian government’s retaliation. “I wish we could have got a deal done and not had to get to those measures. Hopefully this doesn’t last too long and we can all get back to work – business as usual.”
Rasmussen said his main markets are the U.S. and Canada and that up to 90 per cent of his firm’s production has gone south of the border in recent years, up from the typical 60 per cent, primarily because of Alberta’s “stagnant energy industry.”
“When Alberta isn’t operating at full guns, not a lot of our product gets purchased here,” Rasmussen said.
He also said he believes Trump’s tariffs are a negotiating tactic, noting the U.S. and Canadian steel industries work “hand and fist together” and that “if you hurt one, the other is going to get hurt.”
“We have a difficult enough time staying competitive on the global market,” Rasmussen said. “Between our two countries, we have very similar cost structures as the United States does, so tariffing each other just doesn’t help anybody.”
