November 20, 2018
Mobile, Ala. – On Monday in Mobile, U.S. Senator Doug Jones led a field roundtable on behalf of the Senate Committee on Homeland Security and Governmental Affairs (HSGAC) to examine the effects of the Administration’s tariffs and trade policies on Alabama manufacturers and farmers. Participating speakers included leaders from all four major automakers in Alabama, the steel industry, the Port of Mobile, and farmers of soy, peanuts, sweet potatoes, and cotton. Highlights from the roundtable discussion are included below.
“I am troubled by the growing global trade war, not least because of the high cost to Alabama citizens. Alabama is an exporting state. More than 560,000 Alabama jobs are supported by trade. Our farmers send their crops across the globe and we are the third-highest exporter of automobiles….I have heard estimates from the U.S. Chamber of Commerce that the trade war could have an impact on as much as $4.4 billion in Alabama exports,” Senator Jones said in his opening remarks.
Jones continued, “Despite many concerns with the administration’s current trade policies, I also understand the need to address the bad actors. I grew up in Fairfield… in the shadow of [the U.S. Steel] mill. I worked at that steel mill one summer in the cotton tie mill ten hours a day, six days a week…it was good work and [those were] great-paying jobs and it built a middle class….So I know the impacts of global trade on the steel industry and where things have gone and how illegally subsidized steel has hurt my city, has hurt my state, and has hurt this country. It is a national security concern. A strong steel industry is important for our national security—there is no question about it and we can’t stand idly by.”
WHAT THE EXPERTS SAID AT THE ROUNDTABLE:
Auto manufacturers and farmers weigh in on the harmful impacts of tariffs on their products:
Allyson Edwards, Assistant Division Manager, Honda Manufacturing of Alabama: “The potential cumulative impact of new trade policies is unsettling for those in our industry who make decisions about future investment. This uncertainty about future cost in an industry with long product lead times adds risk to doing business in the U.S. Unfortunately, Honda has been impacted by a number of trade actions…despite our local [steel] purchases, the tariffs represent hundreds of millions of dollars in added cost….imposing tariffs here will put American workers, American consumers, American communities, and the American economy at risk.”
Mark Kaiser, soy, peanut, and cotton farmer: “Soybeans are probably one of our largest crops that we export and our largest customer is China. We’re down 98-percent for the year. Those soybeans are produced and they’re going into storage now. Farmers are holding onto them. I don’t know what’s going to happen if China doesn’t go to the table and start buying, but they’re going to Brazil. Brazil’s going to be harvesting by the end of December. They may totally take us out of the market and we’ve been working on this market for 20 years. We’re in a situation where we’re taking the brunt of this tariff war right now and we’re the least prepared to do it.”
Jimmy Lyons, Director and CEO, Alabama State Port Authority: “I think that we’re just beginning to see the impacts and what we’re going to see in the future is going to be much more impactful than it has been to date. We’ve seen it in grain. We’ve seen it in our steel exports. We’ve seen orders cancelled. We’ve even seen metallurgical coal shipments cease to at least one country who’s been subject to the steel tariffs. The effects are far-reaching and it’s created an environment of uncertainty in business….Ultimately one of the concerns that we have is the potential inflationary impact of these new taxes, which is exactly what they are. You can call them ‘tariffs,’ but they’re taxes. These tariffs and taxes are eventually going to fall on the shoulders of the American people.”
Daniel Penry, fourth-generation soy, peanut, and sweet potato farmer: “Our farm has been struggling since ’14 with prices. Prices have just been down, down, down. We’ve got neighbors that have quit and gone on and done something else….Things are bad in agriculture and they have been for a while. I know that it’s a matter of national security that we be able to grow our own food so we can eat.”
David Fernandes, President, Toyota Motor Manufacturing Alabama, Inc.: “We believe tariffs are just another way of saying taxes. We know the impact of taxes on our entire industry. We are already seeing it in the steel and aluminum tariffs that went into effect earlier this year under Section 232 provision of the U.S. Department of Commerce. Our business philosophy and purchasing strategy has always been to build where we sell and build where we build. That’s why more than 90-percent of our steel comes from the U.S. Now, we’re here about import tariffs on vehicles and auto parts, and the idea that our imports are a national security [threat] and, personally, that is very frustrating. The idea that 137,000 hard-working Americans at our facilities, our supplier network, and our dealers across the country could be considered a national threat—that’s impossible. But beyond that, tacking a 25-percent tax on car parts in the U.S. is a direct hit by the government on an otherwise healthy industry—an industry that is been a driving force in America for more than 100 years. The bottom line is that prices will go up.”
Graham Jones, Project Director, Aker Solutions, on the process of seeking exclusions from tariffs: “The process itself – just even the application – is not very straightforward. There’s no timelines and these tariffs are quite large on our product, so it doesn’t, with everybody else, doesn’t really allow us to do any kind of financial planning or forecasting.”
Alabama steel-makers weigh in on the benefit of steel tariffs for national security and business:
Brent Sansing, Plant Manager, Fairfield Works Tubular: “The United States cannot afford to outsource an industry as vital to our national and economic security as steel. During an emergency, we need steel-making here at home, not awaiting delivery from overseas. We need American-made steel to rebuild our bridges and infrastructure and to harness and transport our energy resources. America cannot achieve energy independence if we are reliant on foreign steel to develop our own energy resources. As the [Section] 232 [investigation] moves forward and is refined, it is critical to not lose sight of the harm inflicted on American steel-making and jobs by foreign imports.”
Mike Lee, Vice President and General Manager, Nucor Steel Decatur: “Our industry has endured years of unfair trade, with an unrelenting flood of dumped and subsidized steel, overwhelming our market. This has led to reduced production, weaker balance sheets, and layoffs. Although Nucor was able to avoid layoffs, everyone at our company is paid on the basis of performance, so when production and profits fall, we all take home less money for our families. For years, we fought back with trade cases and got duties imposed on nations that skirted the rules only to see those countries cheat again by trans-shipping products through third countries.”
Yesterday’s roundtable participants included: Robert Burns, Vice President, Human Resources & Administration, Hyundai Motor Manufacturing Alabama; Rick Clementz, General Counsel, Mercedes-Benz U.S. International; Allyson Edwards, Assistant Division Manager, Honda Manufacturing of Alabama; David Fernances, President, Toyota Motor Manufacturing Alabama, Inc.; Graham Jones, Project Director, Aker Solutions; Mark Kaiser, soy, peanut, and cotton farmer, Seminole, Alabama; Mike Lee, Vice President and General Manager, Nucor Steel Decatur; Jimmy Lyons, Director and CEO, Alabama State Port Authority; Daniel Penry, soy, peanut, and sweet potato farmer, Daphne, Alabama; and Brent Sansing, Plant Manager, Fairfield Works Tubular.
A full video of the Senate HSGAC field roundtable is available here.