McCaskill Focuses on Missouri Businesses Hit by Escalating Trade War
Senator pushes Commerce Secretary to quickly grant tariff exemptions for affected Missouri businesses
WASHINGTON – U.S. Senator Claire McCaskill, who has called for an end to the current trade war that is costing Missouri jobs and threatening Missouri’s agriculture producers, today highlighted Missouri businesses that are impacted by the trade war in an effort to seek action by the Administration to protect Missouri jobs.
“Missouri jobs and livelihoods are at stake—and I don’t understand the decision to escalate this trade war with no end in sight, risking critical foreign markets and doing lasting damage to Missouri’s economy,” McCaskill said. “It’s time to end this trade war and provide necessary relief for the thousands of Missouri jobs that are at risk.”
McCaskill is calling for quick relief for Missouri businesses by the Department of Commerce, which oversees the tariffs and exemption requests for specific products that Missouri manufacturers import. Since tariffs were first enacted in March, American businesses have submitted more than 22,000 exemption requests, of which the Commerce Department has only given final ruling on 508 as of last week.
“The Commerce Department’s exclusions process is entirely too slow and cumbersome, and Missouri manufacturers can only hope to be provided relief after they have already paid for tariffs that the Administration has recklessly implemented,” wrote McCaskill to Commerce Secretary Wilbur Ross. “Commerce must take seriously the harm these tariffs are doing to our manufacturers, and make sure that these companies are quickly granted exclusions they need to survive. Additionally, the Administration must reevaluate its reliance on tariffs as a trade measure, and seek out ways to level the playing field that do not do harm to American manufacturers and our economy.”
In her letter to Secretary Ross seeking relief for Missouri jobs, McCaskill highlighted the following Missouri businesses:
- ABB – Jefferson City: Electrical steel is an essential component for American manufacturing that is not available in sufficient quantities in the United States—some of the most important kinds of electrical steel are not available at all from domestic suppliers. Missouri’s manufacturing sector depends on the availability of this product. ABB employs 1,400 Missourians, including 1,100 at a facility in Jefferson City that manufactures transformers for the electrical grid and industrial facilities, and is now paying tariffs on the imported electrical steel they use in their Missouri operations, while its customers can buy a competing product from a foreign manufacturer and avoid the additional costs from the tariffs.
- Aluminum foil packaging industry: Joplin is home to companies that convert thin aluminum foil into the packaging we recognize on our food, drinks, and medical supplies to preserve and keep products sterile and safe. Only one domestic company produces this particular kind of aluminum foil, and it can only supply a small fraction of the needs of the flexible packaging industry. While these American manufacturers wait for a reply to their exclusion requests, their customers can just avoid the tariffs by switching to foreign competitors that can simply convert foil before importation. The tariffs threaten these supply chains and the domestic flexible packaging industry, which supports good manufacturing jobs in Missouri and across the Midwest.
- Anheuser Busch – St. Louis: The United States can and bottle industry supports thousands of jobs and is critical to our national food supply. Domestic suppliers can only produce less than half of the raw materials required by American industry. Anheuser Busch has over 3,000 employees in the state, including 300 employees in Arnold at a newly expanded aluminum can manufacturing plant. The increased costs to these manufacturers from the steel and aluminum tariffs risks higher prices for consumers and threatens the thousands of jobs in Missouri.
- CNC Machine Products – Joplin: CNC Machine Products manufactures bearings from specialty steel imported from Japan and Sweden. These materials are ordered from foreign suppliers six months before delivery and now cost thousands of dollars more because of the steel tariffs. This business has waited weeks for their tariff exclusion request to be considered, with no indication that it will be processed anytime soon.
- Deutsche Precision – Maryland Heights: Companies that operate in competitive environments have small margins to work with, and any price increases can immediately threaten their existence. Transmission parts manufacturer Deutsche Precision is one such low margin business that is now paying 25 percent more for imported specialty steel inputs. With their only customer, a supplier of transmission parts to the major American auto manufacturers, rejecting their price increases, Deutsche Precision’s business is threatened. They will soon have no one to sell to should they fail to get a tariff exclusion. Despite filing for their 13 exclusions in May, their requests only posted in July, and the company has no knowledge of when their exclusion will be processed by the Department of Commerce.
- Laclede Chain Manufacturing – Fenton and Maryville: Higher prices from American steel and aluminum producers are also a threat to jobs at Missouri manufacturers that use domestic steel and aluminum. Laclede Chain Manufacturing Company, based in Fenton, already had to scale back plans for expansion, lay off more than 20 workers, and reduce employee shifts. This is not the first challenge faced by a company that has existed since 1854 in the era of the wagon trains. The President and CEO of Laclede Chain Manufacturing submitted testimony in May 2018 about the damage the tariffs and increases in domestic steel prices have on domestic manufacturing. Laclede Chain was forced to raise their prices after they saw the cost of domestic steel increase by an average of 25 percent in just five months this year. There is no exclusion process for companies like Laclede Chain Manufacturing, but they still face challenges caused by the steel tariffs.
- Mid Continent Nail Corporation – Poplar Bluff: Mid Continent Nail Corporation is another Missouri company that requires immediate assistance, but is left waiting for a decision on applications for tariff exclusions. Mid Continent, the country’s largest nail manufacturer, employs 500 workers in Poplar Bluff, Missouri. Just weeks after the imposition of tariffs, customer orders fell by more than half and the company announced 60 layoffs, accounting for more than 10 percent of their workforce. The company predicts hundreds more will lose their jobs if things do not change.
- Nidec – St. Louis: Electrical steel is an essential component for American manufacturing that is not available in sufficient quantities in the United States—with some of the most important kinds of electrical steel not available at all from domestic suppliers. Missouri’s manufacturing sector depends on the availability of this product. Nidec, a company that is headquartered in St. Louis and manufactures motors of all shapes and sizes, now has to pay tariffs on the imported electrical steel they use in their domestic operations. A customer could easily buy a competing product from a foreign manufacturer and avoid the additional costs from the tariffs.
- Proctor & Gamble – Cape Girardeau and St. Louis: Global consumer products companies use Missouri as the center of manufacturing for customers across North America. Procter & Gamble has 1,100 employees at their Cape Girardeau plant who manufacture Charmin and Bounty paper products, and 400 employees in St. Louis at a plant manufacturing dishwashing detergent and Febreze. Canada targeted all of these Missouri-manufactured products for retaliation by imposing a 10 percent tariff. Even in the consumer products industry, there are thousands of Missourians caught in this global trade war.
- RotoMetrics – Eureka: Missouri manufacturer RotoMetrics in Eureka is the largest purchaser in the country of certain kinds of tool steel and purchases a significant amount from domestic sources. However, there are some kinds of steel not available from these same producers. The company applied for exclusions so they can continue to purchase the steel that is unavailable domestically but saw objections to their request from competing businesses. Challenging the objections filed against the company’s exclusion requests presented even further challenges as the Commerce Department has no clear process for companies to dispute these objections. RotoMetrics risks losing business to foreign competitors that manufacture in other countries because those foreign manufacturers can avoid the 25 percent tariff on their raw materials and now have a price advantage in a competitive global market.
- SEMO Box Company – Cape Girardeau: The steel and aluminum tariffs are causing damage that cascade across Missouri industries, even to those that do not rely on these same raw materials. When Missouri’s manufacturers lose business due to the tariffs, their suppliers also suffer. The reduction in business at Mid Continent Nail Corporation in Poplar Bluff resulted in layoffs at one of the company’s major suppliers, SEMO Box Company in Cape Girardeau. This demonstrates the spiraling damage coming for Missouri’s economy.
- Silgan Containers – Mt. Vernon and St. Joseph: The United States can and bottle industry supports thousands of jobs and is critical to our national food supply. Domestic suppliers can only produce less than half of the raw materials required by American industry. Silgan Containers has nearly 200 employees in Mt. Vernon and St. Joseph producing food containers from tinplate steel. The increased costs to these manufacturers risks higher prices for consumers and threatens the thousands of jobs in Missouri and other states.
- Unilever – Independence and Jefferson City: Unilever, one of the world’s largest consumer products companies, has nearly 2,000 employees in Missouri including 500 in Independence who manufacture soups, noodles, dressings and similar products, and 475 employees in Jefferson City manufacturing hair care products, lotions and body wash. Canada targeted all of these Missouri-manufactured products for retaliation by imposing a 10 percent tariff.
- White River Marine Group – Bolivar, Clinton, Lebanon, Ozark, and Springfield & the recreational boat manufacturing industry – Lake of the Ozarks region: Missouri is home to several recreational boat manufacturers in the Springfield and Lake of the Ozarks regions, with 16,000 direct and indirect jobs in Missouri tied to the recreational boating industry. The raw materials for these Missouri-made products, like the aluminum fishing boats manufactured by White River Marine Group, are now more expensive due to the Administration’s tariffs. Furthermore, the retaliatory tariffs imposed by the European Union, Canada and Mexico will hit 69 percent of recreational boat exports. The combination of the aluminum tariffs and the retaliation from the largest foreign customers for American-made recreational boats will undoubtedly result in job losses to this industry.
McCaskill has been a strong advocate on behalf of Missouri businesses and workers in the face of the ongoing trade war. Following China’s implementation of retaliatory tariffs last week that harm Missouri agriculture exports, including soybeans and pork, McCaskill called on the Administration to end the trade war that “shuts our farmers and ranchers out of critical markets.”
As product-based exemptions from steel and aluminum tariffs are stuck in a backlog and country-based exemptions from the largest suppliers of steel and aluminum imports received only temporary extensions, McCaskill advocated on behalf of Missouri small businesses facing large financial burdens from the tariffs by calling on Secretary Ross and the Administration to help small businesses navigate the tariff exemption process to give them much-needed certainty and transparency.
Full text of letter HERE.
Visit mccaskill.senate.gov/
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