Industry Manufacturers and Distributors Talk Aluminum and Steel Tariffs

Recently announced and proposed tariffs on raw materials continue to be an ongoing discussion worldwide as the U.S. and its trading partners shift their positions on international trade.

To help determine the potential impact of these tariffs on the home improvement industry, the North American Retail Hardware Association (NRHA) recently conducted a survey with more than 75 of the industry’s top manufacturing and distributing companies.

According to the results of this survey, nearly 80 percent of companies responding believe the tariffs on aluminum and steel will negatively impact their operations. About 19 percent say they don’t know if the effects will be good or bad, and a small percentage think they will be positive.

Study participants who expect positive results say they think the tariffs will strengthen the U.S. economy and help the country get trade concessions from other nations.

Nearly 90 percent of manufacturers and distributors surveyed expect tariffs on imported aluminum and steel from countries such as China to force them to raise their product prices.

Some of them believe the increased prices may not impact them negatively, because their competitors’ pricing will also have to increase.

A few survey participants also say the tariffs could put U.S. products in a better price position compared to Chinese goods and reduce the amount of low-quality items in the marketplace.

More than half of the survey respondents report that their production costs will rise because of the tariffs and most of the companies answering the survey say they will be asking their suppliers to help offset these higher costs.

Nearly 60 percent of the companies surveyed expect to be forced to reduce their margins and about half of them think their businesses will be less competitive as a result of the tariffs. Only 13 percent of the survey participants do not plan to make changes because of the added tariffs.

Also in response to the higher costs, many of the companies plan to source aluminum and steel from less affected countries, and look for more and better domestic suppliers.

However, manufacturers and distributors are uncertain about whether domestic suppliers will be able to keep up with current manufacturing, let alone provide for industry growth.