As world leaders bickered all weekend, people like Jim Knott Jr. grew more worried about simply paying the bills.
Knott is among countless manufacturing executives who are watching their profits crumble following the Trump administration’s decision to impose 25-percent tariffs on steel imports from major trading partners such as Canada and the European Union.
President Donald Trump says the tariffs are all about growing US jobs. But at Riverdale Mills, the factory that Knott runs in Northbridge, the opposite could happen. About 200 people work at the plant, which makes various welded-wire mesh products such as those used in lobster traps. Keeping everyone employed is getting tougher but remains a priority: Knott says the cost of steel to Riverdale has nearly doubled since Jan. 1, in large part because of the tariffs or anticipatory hoarding that took place in advance of them.
Knott expects many customers will simply buy from overseas competitors if he raises prices; some are already switching in anticipation of a price hike. For now, Riverdale’s owners are absorbing the extra costs by accepting reduced profits. But at some point, jobs may be at risk. Knott had hoped an agreement could be reached at the just-ended G7 summit to exclude Canada — the largest exporter of steel to the US — from the tariffs. But the two countries traded insults instead.
One problem with the Trump administration’s approach: The number of people who work in US manufacturing plants that use steel as a component vastly outnumbers the jobs in steel production. Knott says the domestic steel plants are overbooked. Eventually, they could ramp up hiring to meet the demand. But the extra costs will take their toll on the legions of manufacturers that regularly buy steel. As a result, Knott and his colleagues will face plenty of tough decisions in the weeks ahead without some relief from these escalating trade battles.