Ellwood Group affected by Section 232 steel tariffs (US)

One example Barensfield cited was Ellwood Group Inc. selling stell ingot to a customer in Houston, Texas for extrusion pipe that is exported for use in power plants in China. “Becuase of the new Chinese retaliatory tariffs on imported steel pipe, our Houston customer will likely lose that Chinese business to European pipe competitors,” Barensfeld said. The New Castle facility has one area of its operations that is being directly affected by the steel tariffs, Barensfeld said. Barensfeld said the New Castle facility supplies a Canadian subsidiary with forged steel blocks that are used for molds to make plastic auto parts.

The trade war tariff has invaded New Castle.

Earlier this year, President Donald Trump enacted tariffs on goods from China, Canada, Mexico and the European Union, bringing back an almost forgotten aspect of foreign trade that had been waning in recent decades. However, President Trump and his America First campaign have brought back tariffs on foreign goods which was met with similar tariffs from those countries. With the enactment of Section 232 of the Trade Expansion Act of 1962, tariffs were placed on steel and aluminum imported from other countries and ended the exemptions for tariffs on those products imported from Canada, Mexico, and the European Union. Section 232 places a 25 percent duty on imported steel products and a 10 percent tariff on imported aluminum products. Ellwood Group Inc., owner of Moravia Street’s Ellwood Quality Steel operation, has faced mixed results in regards to tariffs affecting its business.

“The impact of the Section 232 tariffs on orders to Ellwood Group Inc. has been mixed, so far,” said David E. Barensfeld, chief executive officer of the company. “On the one hand, we are starting to see inquiries from customers who previously bought most of their steel from foreign suppliers.

“On the other hand, the retaliatory tariffs set up by foreign countries in retaliation for the Trump tariffs have cost us some orders in those countries.”

One example Barensfield cited was Ellwood Group Inc. selling stell ingot to a customer in Houston, Texas for extrusion pipe that is exported for use in power plants in China.

“Becuase of the new Chinese retaliatory tariffs on imported steel pipe, our Houston customer will likely lose that Chinese business to European pipe competitors,” Barensfeld said.

The New Castle facility has one area of its operations that is being directly affected by the steel tariffs, Barensfeld said.

Barensfeld said the New Castle facility supplies a Canadian subsidiary with forged steel blocks that are used for molds to make plastic auto parts.

“Because of the new, retaliatory tariffs enacted by the Canadian government on steel from the United States, our New Castle plant is no longer a competitive supplier of forged steel blocks to that Canadian subsidiary.”

The bottom line, Barensfield said, the measure is “costing us work in New Castle.”

While operations in New Castle have been affected by the tariffs, Barensfield said there have been no reductions in working hours nor were there any layoffs.

“We are finding other orders to replace lost work, so far,” Barensfield said. “Our policy is to avoid furloughing employees during periodic market down cycles because we have worked too hard to recruit and train good employees; they are too valuable to lose.

“We expect to find new markets and customers to more than compensate for the negative effects of tariffs.”

President Trump enacted the Section 232 tariffs, citing national security as the main reason, which Barensfield explained the economics behind the decision.

“In a more general policy sense, however, there is some truth to Trump’s argument that a strong steel industry is necessary to safeguard American national defense,” Barensfield said. “In New Castle we have a 10,000 ton press and other equipment to forge extremely long, extremely heavy propulsion shafts for US Navy vessels, such as aircraft carriers and submarines.”

Barensfeld said the press can make 70-foot long propulsion shafts that are 100 tons in weight.

“We could not afford to install and operate this large, special equipment on the strength of US Navy work alone,” Barensfield said. “We also need a robust, recurrent book of commercial business from other, non-U.S. government industrial customers to share its cost.

“If Chinese and other foreign companies capture most of the commerical forging business in America using unfairly cheap prices, companies like Ellwood Group Inc. will no longer be able to make the necessary parts to make our own defense equipment. Do we want to buy US submarine parts from China or France? That would not be very dependable, I fear.”

baddleman@ncnewsonline.com

Source:

http://www.ncnewsonline.com/news/ellwood-group-affected-by-section-steel-tariffs/article_a8ee3c6c-ad69-11e8-ac75-5f05110894fc.html

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