FAIRBANKS — President Donald Trump’s tariffs on steel and aluminum imports have local companies worried, upset and uncertain about future projects and business — even if they think tariffs will ultimately help U.S. manufacturers.
Trump on Thursday approved tariffs of 25 percent on steel and 10 percent on aluminum, with exemptions for Canada and Mexico.
“It’s affecting us big time,” Universal Welding and Fabrication President Tom Zimmerman said. “Prices have gone up a dime in just the last couple of weeks. And that’s a dime a pound.”
Universal Steel is a full-service fabrication shop with anywhere from 35 to 175 employees that does work for local, state and federal government, as well as the oil and mining industry. Enormous dump truck beds in need of service from Fort Knox can occasionally be seen at their shop along the Richardson Highway.
Zimmerman has seen prices increase on everything from raw material to nuts and bolts. He is especially concerned that tariffs will have a chilling effect on construction.
Universal Welding bid on jobs for the F-35 buildout at Eielson Air Force Base three months ago. He’s concerned they’ll be unable to buy steel at the price they bid.
“That’s the problem, tariffs haven’t even been instituted, but the steel prices are going up as if they have,” he said on Wednesday, before tariffs were officially imposed.
When it comes to contract bids, Griffard Steel president J.D. Wilkerson is concerned for the same reason.
“If I’m awarded those bids, they’re no longer any good,” he said. “Just since all the rumblings I’ve seen a 12 percent increase in what I’ve bid that steel at. ... The steel suppliers are jacking it up in mills right on down the line.”
For more than four decades, Griffard Steel has provided steel fabrication and erection services to Fairbanks.
Jerry Freel, Alaska’s branch manager for Holaday-Parks, has a more optimistic view on the tariffs.
“In my opinion, I’m not worried about it right now,” he said. Holaday-Parks’ primary business is heating and cooling ventilation.
Freel did acknowledge the tariffs make people nervous, but said, “I think in the end it would be a good deal for the country.”
C&R Pipe and Steel manager Dennis Wilfer said a rise in prices is to be expected. His business has supplied Fairbanks with all manner of metal — pipes, steel, aluminum and more — for 25 years.
“If you raise the price of imports, it gives room for the domestic markets to raise their prices, and it’s going to cost the consumer more money,” he said. “It’s going to make a big difference if you’re buying a new pickup truck.”
Wilfer thinks tariffs have the potential to severely damage Alaska’s oil industry, which could further harm the state’s already struggling economy.
Even though the tariffs surprised many people, Wilfer explained they were months in the making. Around the time Trump was elected, steel companies filed a petition for relief under Section 232 of the Trade Expansion Act of 1962, claiming they were being harmed by imports, according to Wilfer.
The U.S. Department of Commerce, under Secretary Wilbur Ross, investigated the claims and in January released two reports separately detailing the effects of steel and aluminum imports on national security. The reports proposed remedies, including tariffs.
The Commerce Department’s report on steel imports concluded that steel imports “has the serious effect of placing the United States at risk of being unable meet national security requirements.” The report on aluminum used nearly identical language.
Wilkerson echoed that sentiment, saying the U.S. doesn’t build steel anymore, “we don’t build the sword here anymore.”
Last April, Trump signed a “Buy American, Hire American” executive order, directing the federal government to fully enforce guidelines prioritizing American goods, especially steel, in public projects.
Wilkerson and others agree that U.S. steel and aluminum manufacturing needs help, but not necessarily through steep tariffs. “I don’t know if Trump’s just rattling the cage to see what falls out,” Wilkerson said.
Wilfer doesn’t doubt that the nation’s national security is jeopardized by a small steel industry, and he knows it will take years to rebuild America’s manufacturing capacity, but he still disagrees with Trump’s approach.
“You can’t solve it all in one fell swoop,” he said.
On Thursday, Alaska Sen. Dan Sullivan and six other Republican senators sent Trump a letter expressing concern about the tariffs.
“We remain concerned that imposing tariffs risks alienating key international partners that contribute to our ability to defend our nation and maintain international stability,” the letter states.
Sullivan is a member of the Senate Committee on Commerce, Science and Transportation.
Contact staff writer Robin Wood at 459-7510. Follow him on Twitter: @FDNMcity.