US workers fear steel tariffs could be nail in the coffin

Boxes of products on a pallet are seen at the Mid Continent Nail Corporation where customers have stopped placing orders in favor of cheaper imports of nails, in Poplar Bluff, Missouri on June 29, 2018.
Boxes of products on a pallet are seen at the Mid Continent Nail Corporation where customers have stopped placing orders in favor of cheaper imports of nails, in Poplar Bluff, Missouri on June 29, 2018. PHOTO: AFP

POPLAR BLUFF, UNITED STATES (AFP) - The mood is tense at a nail factory in rural Missouri, where workers fear that steel tariffs imposed by President Donald Trump's administration could cost them their jobs.

As giant spools of steel feed the manufacturing process, the men and women operating the whirring, screeching machines of the Mid-Continent Nail Corporation wonder if Mr Trump himself will come to their rescue.

It has been a successful business, employing some 500 people in the rural community of Poplar Bluff.

"People like us, we thought: biggest nail manufacturer in the United States, our jobs should be safe. Obviously, it's not," said machine shop supervisor Sean Hughey.

The nail company is publicly raising the alarm, saying the tariffs on steel imports may put it out of business.

They have had to raise prices to pay for more expensive steel and cannot compete with cheaper imported nails - completed products that face no tariffs at all.

"It's a misguided policy," said Mr Chris Pratt, Mid Continent's chief financial officer and operations chief. "I just think it's a policy that wasn't thought out completely. And we got to fix it." .

Many of the workers here voted for Mr Trump. And the Poplar Bluff region favoured the president over Mrs Hillary Clinton in the 2016 election by a margin of more than 60 per cent.

They liked his promise of a resurgence in American manufacturing.

 
 

"I just want to have America on a level playing field, you know. And he seemed like he was interested in doing that," said Mr Hughey.

Support for Mr Trump has not wavered. But workers want the brash Republican to provide an exemption from the tariffs, so the factory can continue to import cheap steel from Deacero, the Mexican company that owns Mid Continent.

But the company's exemption request is one of more than 20,000 the Trump administration has received.

Factory executives say they cannot wait.

Orders have plunged 70 per cent and they already have shut down one of their three plants at a sprawling complex in Poplar Bluff. Sixty workers are laid off and hundreds more may soon lose their jobs.

If nothing changes within a few more months, the company might close altogether.

"We need help immediately," said Mr George Skarich, Mid Continent's vice-president of sales. "Because the longer this lasts, the longer it puts us in a position of losing money on a daily basis."

Poplar Bluff is a small community of approximately 17,000 with a handful of manufacturing plants, surrounded by a seemingly endless expanse of farms.

Mid Continent - source of 50 per cent of all American-made nails - is a regional economic powerhouse.

It is also a lifeline for Ms Diane Brogdon. Her job as a machine operator provides the sole source of income for the 54-year-old and her daughter, who is attending college.

"I'm scared about losing everything I have. I think I'm too old to start over again," she said.

Ms Brogdon has worked at the plant for eight years. Just a few months ago, she felt secure enough to buy a house. Now, she is afraid she will lose it.

She still supports Mr Trump, but wants him to rethink some of his actions.

"He needs to stop and think about the people that might lose their jobs because of some of his policies," she said.

Other plant workers echo Ms Brogdon's sentiment. They are hopeful that Mr Trump would help, if only he heard their pleas.

They have engaged in a media blitz, including a full-page ad in the local newspaper with an open letter asking for the president's help.

"More than any other president in our time, you have shown compassion for US manufacturing workers," the letter says.

Certainly, the tariffs have been good for some.

In March, US Steel hired 500 workers as it expanded capacity at one of its plants just a two-and-a-half hour drive north of Poplar Bluff and is bringing on 300 more this summer.

Mr Sam Anders can attest to the business boom. The 28-year-old travels from town to town for a company that refurbishes steel plant furnaces. He said they cannot keep up with demand.

"We're so far behind on work right now we can't even hardly keep guys out on the road long enough," Mr Anders said.

He is in Poplar Bluff to make repairs at an engine-making plant just across the street from the nail factory. Mr Anders is unsympathetic to the company's pleas and questions why it relies so heavily on cheap foreign steel.

"We only buy American-made stuff, American-made steel, in our shops, where we build all of our equipment," he said.

The problem with the tariffs is that even if tens of thousands of steel manufacturing jobs are created, hundreds of thousands of jobs may be lost due to subsequent tit-for-tat duties.

Economist Laura Baughman of the research group Trade Partnership Worldwide researched US tariffs imposed in 2002 and predicts job losses this time around could be as high as 400,000.

"Right now, you're seeing it already," Ms Baughman said. "There's the steel-consuming jobs, which is everything from nails and automobiles, to construction...as well as jobs that get lost in restaurants, for example, because people who lose jobs don't go out to restaurants any more."

Senator Claire McCaskill, a Missouri Democrat, has taken hold of the issue during a tough mid-term reelection campaign and says her office has accumulated a list of dozens of worried companies.

"We want to keep this issue out front and centre so that we can try to save as many of these jobs as we can," she said, after touring the nail factory with executives.