Nail firm hammered by tariffs
Mid-Continent Nail has struggled significantly ever since President Trump imposed a 25% tariff on aluminum and steel.
Because of the tariff, the company had to hike up prices; consequently, nail sales have dropped 50%. Last week, Mid-Continent laid off 12% of its employees. According to the company, they will be bankrupt by early September if they must still face the tariffs.
And they aren’t the only ones – Mid-Continent is one of roughly 21,000 companies that have requested tariff exemptions from the Commerce Department. Commerce Secretary Wilbur Ross responded to their plea,
I’m not belittling their situation at all. But given the importance of it to them, it’s very unfortunate that they waited all these weeks to file the request. Under the authority we were granted, there is a process we have to follow.
However, despite the unrelenting attitude, the Commerce Department may need to act soon to avoid economic turmoil. According to Moody’s Analytics, the aluminum and steel tariffs could lead to the loss of roughly 700,000 jobs in the US economy alone.
Mid-Continent Nail has considered moving its factory to Mexico, where it would not face tariffs. The company could then buy steel for normal prices and export them to the US for no cost, as the tariffs do not apply to finished goods.
Although President Trump’s tariffs are creating some steel factory jobs, they are also taking away many, as seen with Mid-Continent Nail. In order to save the dissolvement of many US factories, the White House may need to make some exemptions.
Featured image via Pixabay/InspiredImages
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