US to impose tariffs on steel, aluminum imports
Two years after voting for President Donald Trump by a 61-point margin, a southeast Missouri county is watching one of its largest employers wither away after the president imposed tariffs on steel.
Mid Continent Nail employed about 500 workers in Poplar Bluff — population 17,070 — before Trump’s tariffs on Mexican steel took effect in June. Since then, nearly 200 employees have been laid off or left voluntarily.
Mid Continent’s facilities could shutter “by the end of the month,” said the company’s spokeswoman, Elizabeth Heaton.
Chris Pratt, general manager at Mid Continent, was hesitant to put a date on the company’s possible demise as long as its owner, Mexico-based Deacero, continues to support the plant.
“Personally, I see a glimmer of hope, but every day I get an opportunity to walk out into my plant, I see that glimmer of hope in my employees’ eyes diminishing,” Pratt said.
Less than a month before voters go to the polls, Mid Continent Nail is a lightning rod in a larger discussion over Trump’s trade tactics.
In the neck-and-neck race for U.S. Senate in Missouri, both major party candidates are clamoring to help the company as they stake out positions on trade tensions that have Missourians on edge. Incumbent Democrat Claire McCaskill has been fiercely critical of what she calls Trump’s “trade war,” while Republican Josh Hawley has been carefully supportive, saying Trump should be judged by the results he gets.
Soon after Trump’s 25 percent tariff on imported steel went into effect, Mid Continent laid off 60 workers. The company had raised prices on its nails to cover the increased cost of importing steel from its parent company in Mexico. It lost half its customer orders almost immediately and is now down between 70 and 80 percent from a normal year.
The company has held on this long in the hopes of winning an exemption from the steel tariffs through a backlogged process run by the U.S. Department of Commerce. Without that exemption, the company says it can’t compete with foreign producers who ship finished nails into the U.S. tariff-free.
The company’s fate is a political football in the debate over trade.
McCaskill has written letters, visited the plant and pushed the Commerce Department in Senate committee hearings. She blames Mid Continent’s plight on Trump’s policies.
But it is Hawley who has Trump’s ear. His campaign spokeswoman, Kelli Ford, said he’s talked about Mid Continent with the White House and the president. While he won’t say directly whether he supports Trump’s tariffs, he supports winning the trade war he says the U.S. didn’t start. He believes the tactics should be judged based on the results Trump gets, like the new trade agreement between the U.S., Canada and Mexico to replace the North American Free Trade Agreement.
“We are really hopeful that their help will make a difference,” Heaton said, “especially Josh Hawley, who we know is close to the president and who we’re hopeful can make a difference here when it counts.”
In the meantime, Heaton and Pratt said Deacero has absorbed huge losses to keep the Poplar Bluff facilities open.
“If it was any other business, I don’t think that they would still be open today,” Heaton said, “but Mid Continent and its parent company, Deacero, made a business decision to dig deep in their pockets and find a way to see this exclusion process through, and unfortunately, it’s taking a lot longer than anyone anticipated.”
Politics of trade
When Butler County, where Poplar Bluff is located, turned out overwhelmingly for Trump, Pratt said he didn’t think people thought “Make America Great Again” would mean seeing one of their largest employers go under. Even now, though, he said people still support Trump and see their situation as an unintended consequence of his policy.
“And they’re hoping that he’s going to recognize it and that he’s going to fix it,” Pratt said. “If they all lose their jobs, is their support for him going to diminish? I would say so.”
They’re frustrated, but Pratt said, “There are a lot of employees that have still not lost hope in the Trump administration, that still believe he’s trying to do the right thing.
“And I do, too.”
That makes it especially important for Hawley, who has Trump’s enthusiastic support in one of the most hotly contested Senate races in the country, to help.
“Some of these people out here are banking on him,” Pratt said, adding that Hawley talked to workers at the plant when he visited.
Ford said Hawley is optimistic he can nudge Trump’s administration. He has spoken with both the White House and the president, and written to and called the president of Deacero.
The White House did not respond to a request for comment for this article.
Hawley said at a campaign stop this week in Harrisonville that he had also urged the president of Deacero to keep the nail company open.
“He told me that it has been a very profitable facility for them right up until the middle of this year, and I said to him, ‘Then, it sounds like to me you have the wherewithal to keep this facility open,’ and I hope he will do that,” Hawley said. “I really think he owes it to this community. They’ve made a lot of money on this plant.”
Pratt said Deacero is investing millions of dollars every month to keep the plant open.
As of Monday, the Commerce Department said it had received 39,279 exclusion requests, including 24 filed by Mid Continent for varying types of steel used to make nails. Just over 70 percent of them remain undecided.
Mid Continent is in the last stages of its exemption request process after objections filed by two domestic steel companies that believe American producers can supply Mid Continent’s steel. One of the companies said it used to sell steel to Mid Continent before Deacero bought the nail company in 2012.
But Pratt said the company used to buy only a small amount of steel wire from the American supplier. The network of domestic suppliers the company used to use can’t meet its needs anymore, he said. And now that the tariffs are in effect, steel prices are rising to the point that buying raw steel from domestic producers costs more than customers would spend importing foreign nails.
“By the time I put on labor, packaging and everything else into my cost, there’s no way I could compete,” Pratt said.
McCaskill took aim at the Commerce Department’s handling of the exclusion process last week.
“This exclusion process has been chaotic and incompetent,” McCaskill said. “There are businesses all over this country that are losing employees on a daily basis because the Commerce Department was not equipped to handle the exclusions that are appropriate.”
She added: “And I don’t think Mid Continent Nail has been treated fairly, and whether or not they keep the doors open, they are losing money hand over fist every day.”
Pratt said he thought tariffs in general would play a big part in the Senate race even if Mid Continent’s story didn’t directly make waves.
“I don’t know who’s going to come out on the winning end of the stick,” he said, “but it’s a tight race and I think they’re both using it as best they can to their advantage.”
Jennifer Duffy, senior editor of the Cook Political Report, said Democrats can use tariffs to tie Hawley to Trump, but it’s not certain it would hurt him. She said it will help him to look like he’s doing something to help.
“Sometimes I think the best way to describe this election is where you stand depends on where you sit,” Duffy said, meaning that voters’ existing ideology can shape the way they perceive an issue.
Cause for trade tension
McCaskill and Hawley point to different sources to lay blame for trade tensions.
The senator’s campaign issued a release Thursday pushing back against an advertisement from Hawley that claims she doesn’t think she needs votes in southeast Missouri. In the release, McCaskill hit Hawley for continuing “to support the trade war, despite its devastating effects on Missouri’s economy and Southeast Missouri, specifically.”
McCaskill also spoke out against the tariffs on Monday, noting Mid Continent was losing customers to foreign nail producers, including China.
“That’s what’s so bizarre about this is we’ve chased their customers into the arms of the Chinese and lost a bunch of American jobs in the process,” McCaskill said.
But like the Mid Continent employees who still support Trump, Hawley is reserving his judgment. He has said multiple times Trump’s hardline tactics should be judged based on the deals he gets. He said the U.S. didn’t start the trade war, but he wants to win it.
“What I’ve said all along ... is I’m in favor of winning this war, and I’m in favor of standing up to the cheaters,” Hawley said. “I think the president is doing that, and I’ve always said let’s judge him by the results he gets, and he’s getting results.”
Asked if he thought tariffs were working, Hawley said to wait and see.