Steel tariffs lead to rising costs; America's largest nail producer may close at the end of the month
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Published Time:
2020-07-10
According to CNNMoney, a financial website under CNN, Mid Continent Nail, the largest nail producer in the US, is continuously laying off employees to cope with the rising costs caused by Trump's steel tariffs. If this situation continues, the company may be forced to shut down before the end of September.
According to CNNMoney, a CNN affiliate, Mid Continent Nail, the largest nail producer in the US, is experiencing ongoing layoffs due to rising costs from Trump's steel tariffs. If the situation continues, the company may be forced to close by the end of September.
“I can tell you that if we don’t get immediate relief, we could be shutting down within the next 20 to 30 days,” said General Manager Chris Pratt on Tuesday.
In June, the company stated that it might be forced to close before Labor Day (September 3rd) if it didn't receive a tariff exemption. However, a recent meeting with US Commerce Secretary Wilbur Ross offered hope for an exemption.
“Secretary Ross was very sympathetic to our situation, particularly the potential loss of 500 jobs,” Pratt said. The company has already laid off 150 of its 500 employees since the steel tariffs took effect in June.
Pratt stated that the tariffs have driven up raw material costs, forcing the company to raise product prices, which in turn has led to a sharp drop in orders.
The US Department of Commerce could rule on Mid Continent Nail's tariff exemption request as early as Tuesday, but the company's application is among over 20,000 similar requests from companies stating they cannot source steel and aluminum from domestic suppliers. Most companies are still awaiting a decision.
Mid Continent Nail said it may move production to Mexico, where its parent company DeAcero is located, and then re-export finished nails to the US without tariffs, as Trump's steel tariffs only apply to raw materials, not finished goods.
Mid Continent has been in Missouri for over 25 years. Since its acquisition by DeAcero in 2012, its size has roughly doubled. Pratt said that before the layoffs, the company was the second-largest employer in Poplar Bluff, Missouri.
