by Chris Dyer
August 15, 2018
The fabricated metal products industry is one of many targeted in the Trump administration’s recently imposed tariffs, and like other industries, the potential outcomes are largely unknown. Retaliatory tariffs are mounting. Will the smaller actors in the US fabricated metal products industry maximize their capabilities and expand to meet rising demand?
At the beginning of June, the Trump administration introduced tariffs on imported metals. The 25% steel tariff and the 10% aluminum tariff, which applied to all countries aside from a few temporary or permanent exemptions (e.g., Argentina, Australia, Brazil, South Korea) quickly drew retaliatory tariffs. Supporters argue that excess capacity in the US steel and aluminum industries are the justification for imposing such tariffs, as limiting imports allows domestic producers to utilize existing capacity and presents the opportunity for expansion, particularly for steelmakers.
On the other hand, fabricators are forced to purchase higher-priced US steel rather than importing cheaper steel from Canada or overseas. This raises the prices fabricators and service centers charge for their products, in turn raising revenue. Due to tariffs on finished metal products, demand for US-made fabricated metal products is rising.
With higher input costs for raw metal, higher revenue, and higher demand, smaller shops also have opportunities to expand. For some small firms, the challenge of expanding their business can be significant. Small fabricators may not have the margins or capacity to pass on increased input costs caused by the more expensive aluminum and steel. Without this capability, and without the capability to expand its operation in the face of rising domestic demand, a fabrication shop may not survive these tariffs.
Don’t worry, we have you covered! For additional information and analysis of US industry trends, see Fabricated Metal Products: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group. This report forecasts to 2022 US fabricated metal products demand and shipments in nominal US dollars at the manufacturer level. Total demand is segmented by product in terms of:
To illustrate historical trends, total demand, total shipments, the various segments, and trade are provided in annual series from 2007 to 2017.
Products classified as primary metals (such as iron and steel mill, refined nonferrous metal, and metal foundry products) are excluded from the scope of this report. Re-exports of fabricated metal products are excluded from demand and trade figures.
While you’re there, check out some of our related reports, which include:
Chris Dyer is a Market Research Analyst for Freedonia Focus Reports. He holds a Master of Arts in Security Studies, and his experience as an analyst covers multiple industries.
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