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US Nail Maker Hammered by Tariffs to Pull Out for Mexico?

US Nail Maker Hammered by Tariffs to Pull Out for Mexico?
(Wendy Kaveney/Dreamstime)

By    |   Wednesday, 27 June 2018 10:14 AM

A U.S. nail maker, the country’s biggest, in the red state of Missouri, said it was being hammered by new tariffs and could pull out for Mexico by Labor Day, the HuffPost reported.

Democratic Sen. Claire McCaskill, who is in a tight race for re-election there against Republican Attorney General Josh Hawley, has jumped on the issue and publicly announced the company's first round of layoffs.

Mid-Continent Nail Corp. in Poplar Bluff this week said it had recently let go 60 people from its staff of 500 after a 25 percent tariff on steel imports from Mexico and Canada forced it to raise its prices.

The company said sales have dropped 50 percent in the past two weeks as it attempted to adjust to the new steel costs, the HuffPost said.

James Glassman told CNN his company is faced with shutting down by Labor Day or packing up and moving its operations to Mexico.

"It's obviously an option," Glassman told CNN about moving to Mexico. "It absolutely is something this company does not want to do. It wants to save the jobs in Poplar Bluff, Missouri."

McCaskill hammered on the issue last Wednesday at a Senate Finance hearing with Commerce Secretary Wilbur Ross, saying Mid-Continent Nail was expected to cut 200 more jobs by the end of July.

“The company that has visited with us at length believes they’ll be out of business by Labor Day,” McCaskill said.

George Skarich, the company’s vice president of sales who said he voted for President Donald Trump, said he is so dismayed by the president's trade policies that he lobbying the Democratic senator for help, The Hill reported.

CNN said Mid-Continent has filed for an exclusion to get around the tariff costs, but the company is in line with about 21,000 other companies that have filed for the tariff exclusions.

"I'm not belittling their situation at all," Ross told CNN. "But given the importance of it to them, it's very unfortunate that they waited all these weeks to file the request. Under the authority we were granted, there is a process we have to follow."

According to Moody's Analytics, CNN said, about 700,000 jobs could be affected by next summer because of the tariffs.

While Mid-Continent is considering leaving the country or closing, a group has filed a lawsuit against the administration over the tariffs, arguing that federal legislation improperly delegates trade powers to the executive branch from the legislative branch in violation of the Constitution, the Wall Street Journal reported.

The American Institute for International Steel, a group that includes users of imported steel along with those connected with trade in the alloy, filed the lawsuit on Wednesday. It is joined by Sim-Tex LP, a Texas distributor of pipeline products to the oil-and-gas industry, and Kurt Orban Partners, a California-based trader in specialty steel, WSJ said.

They are asking federal judges to declare Section 232 of the Trade Expansion Act of 1962 unconstitutional and void Trump’s 25 percent tariff on imported steel made under that law's authority.

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A U.S. nail maker, the country’s biggest, in the red state of Missouri, said it was being hammered by new tariffs and could pull out for Mexico by Labor Day.
nail maker, tariffs
508
2018-14-27
Wednesday, 27 June 2018 10:14 AM
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