Tariffs Could Kill My Family Business

An Ohio-based mining conglomerate is lobbying a federal agency to impose massive new tariffs on the steel used in nearly every canned good in America. If the effort succeeds, consumers will pay a whole lot more at the supermarket and hardware store -- and my family's can company would suffer a severe blow.  

My family's firm, Independent Can, opened its doors in 1929. We survived the Great Depression and the Second World War, slowly gaining a reputation for manufacturing some of the nation's best decorative canisters, like the giant popcorn and Christmas-themed cookie tins popular every December. These days, you'll see our tins at some of the nation's trendiest coffee shops.

The company pushing for the tariffs, Cleveland-Cliffs, is a major miner and also the nation's largest flat-rolled steel producer. In March, the U.S. International Trade Commission agreed to consider imposing tariffs of up to 300% on imported "tinplated" steel -- the metal used in everything from our higher-end canisters to canned soups and vegetables to paint buckets -- at Cleveland-Cliffs' request. The company alleges that manufacturers in eight countries -- Canada, China, Germany, the Netherlands, South Korea, Taiwan, Turkey, and the United Kingdom -- are engaging in unfair trade practices by flooding the United States with low-cost tinplate. It hopes the tariffs will force companies like mine to buy their steel. 

As an American steel-can manufacturer, I'd love nothing more than to buy domestic tinplate. But for us, that isn't an option. 

U.S. tinplate steel manufacturers make very little of the higher-quality, specialized steel we need. When we've bought from domestic suppliers in the past, delivery has been unpredictable – rarely on time and often arriving with quality issues. Because domestic steel companies find it difficult to meet our specifications, we have no choice but to rely on foreign steel suppliers. So, if these tariffs go into effect, our input costs could surge by as much as 300%.

Few businesses could survive inflation of that magnitude. One reason we've been able to stay afloat for nearly a century -- despite competition from lower-cost can makers overseas -- is that we've always treated our workers with the utmost fairness. We're proud to have never cut a job due to advances in technology and automation, and that's not going to change anytime soon. 

I like to believe that this culture of mutual respect and loyalty is one reason our more than 400 workers tend to stick around. Some employees -- and not just those in the family -- have worked for Independent Can for more than 40 years. 

It's not just my family business that faces ruin. Evidence shows that tariffs are ultimately paid by American consumers, not foreign manufacturers. 

Consider how the same agency considering these new tariffs, the USITC, recently published a report that found American companies paid almost the entire cost of the tariffs that the Trump administration imposed on $50 billion of Chinese imported steel and aluminum. In effect, a 300% tariff on tinplate steel is a 300% sales tax on the key raw material in nearly every canned good. 

A simple look at the numbers suggests the tariffs will destroy more American jobs than they create. The canned food industry alone directly employs 85,000 workers -- to say nothing of the tens of thousands more who work in various other manufacturing industries that rely on tinplate steel. By contrast, the entire iron and steel manufacturing industry employs just 65,000 Americans. One analysis projects that the tariffs would boost steel manufacturing employment by 66 jobs -- but endanger roughly 40,000 other manufacturing positions. In other words, the taxes could destroy 600 jobs for every new worker employed in steel making. 

The companies that use tinplate steel will have no choice but to pass these taxes on to the end consumer. That'll hit the poorest Americans -- who are more likely to rely on canned foods -- the hardest. 

This isn't hypothetical. Even our longtime clients would have to consider having their products packaged overseas. I know, because I've discussed this issue with some of them.

I'm not an economist or a diplomat. I'm just a small business owner trying to do right by his employees and customers. That's why I'm speaking out -- because if the Biden administration moves forward with these tariffs, it'll help a few well-connected steel bigwigs at the expense of my friends, family, and tens of thousands of other American manufacturing workers. 

Rick Huether is the President and CEO of the Independent Can Company.