Will the softwood lumber tariffs affect your business? Have the steel tariffs affected your business?
Published July 1, 2002 | July 2002 issue
The tariffs [effective in late May] will have an effect on the market
value. With the Canadians having free access in subsidized form, we experienced
a trough. The tariffs should raise the bottom of the lumber market and
make for more stable operations, fewer layoffs and hopefully we can run
at break-even levels. When the tariff does go into effect, Canadian producers
may have to close their doors. We're expecting prices should increase.
By how much, we don't know. ... We're not anticipating significant price
increases. This is the height of the building season, with a downturn
in the fall. We're hoping the downturn won't be as bad as the past three
years2000 was just about disastrous. We laid off 40 percent of our
workforce and haven't called them back.
Jim Hurst, President and Co-owner
Owens and Hurst Lumber Co.Eureka, Mont.
The tariffs are going to increase the price of an average home from $1,000
to $1,800, at a minimum. We'll lose about 10 percent of our business due
to higher prices. People who'd normally qualify for a loan for lumber
supplies may not be able to. It's usually those building the lower-end
homes that will end up not qualifying. It's a very serious situation.
It's not only lumber that will be affected, but the window companies,
floor companies as well as electric and heating. It affects the hiring.
We're not anticipating any layoffs right now. Business is currently very
good. ... At the first of the year the softwood lumber prices rose, possibly
in anticipation. Maybe we'll be lucky and they won't rise as much again.
Rich Vandeloo, Manager
Wickes LumberEau Claire, Wis.
The tariffs wouldn't affect me at all because we use lodge pole
pine, and I harvest my own in Colorado. It's not an issue for me.
John Holm, Owner
High Pine Log FurnitureCuster, S.D.
The prices of domestic steel have skyrocketed. I've been in this
business since June 1, 1966, and the current prices of steel are
escalating to near-record levels. The demand has not caught up with
the pricing. I believe the steel service centers have had very low
inventoriesnot us, but the majority. When they saw the 201
rule [tariff] coming, they scrambled for product to beat the price
increase, and now there's a shortage of product, which is due also
to the shutdown of some steel mills because they aren't functioning
properly. But that's a temporary shortage. ... If demand picks up
between now and early fall, then the economy will be going great
guns. But if demand stays very low, like it is, there'll be a glut
and prices will go down again. ... The tariff immediately gave domestic
mills an opportunity to raise their prices and they've taken full
advantage of that. ... In some cases people will look for alternatives
to steel. The demand is still there from our client base as far
as the usage. We've always kept high inventories. We own our product
at the old price. We'll market our materials at current prices,
and our customers will not be affected as quickly and as drastically
as the companies who didn't have the inventory.
David Berg, Owner
South St. Paul Steel Supply Co. Inc.St. Paul, Minn.
We've seen and heard pricing that's gone up $100 a ton. ... The
tariffs were for 30 percent, but that's a little more than 30 percent.
We're seeing not only our raw material suppliers, but other suppliers
looking for [price] increases. It erodes away from our margins because
our customers will not accept a price increase. It could cause original
equipment manufacturers [OEMs] to have components made outside of
the United States if it cannot be corrected. ... The steel industry
needed something besides tariffs. [Tariffs] are a band-aid that
will hurt OEMs. If this remains a long-term issue, it will push
major manufacturers to go offshore, and that'll be way more devastating
to the economy than what the steel industry employs.
Scott Atkinson, Sourcing Specialist for Raw Materials
Bobcat Co.Gwinner, N.D.
The tariffs have affected our customers' business in the steel
market. We've seen resurgence in certain steel markets and have
seen strength in our iron ore business. ... The steel industry fundamentals
in the United States have turned positive due to the tariff arrangement
and to the improving economy. I would say the demand for iron ore
is improving to a level we haven't seen for the last two or three
Ralph Berge, Public Relations Manager
(Owner of taconite mines in northern Minnesota and the Upper Peninsula.)