Firms plot plans to face ‘cost and chaos’ of US tariffs
DETROIT/MONTREAL/HOUSTON — Executives across industries reliant on steel and aluminum imports were scrambling to offset the cost of Donald Trump’s move to slap 25-percent tariffs on those key metals after previous tariff threats from the White House that were later scrapped.
Companies ranging from Coca-Cola and Ford to smaller aluminum, aerospace and appliance firms expect to be affected by US President Donald Trump’s moves, which Ford CEO Jim Farley said have so far added “a lot of cost and a lot of chaos” to American business. The tariffs, announced Monday, are expected to go into effect in mid-March.
But the White House’s frequent threats of various shapes and sizes have left executives, investors and consumers unsettled.
“There’s so much we don’t know. We don’t know if they will go in place. We don’t know if there will be exemptions at all,” said David Gitlin, CEO of heating and refrigeration company Carrier Global, on the company’s earnings conference call Tuesday.
US businesses have warned of fallout from tariffs, with many manufacturing companies finding it difficult to plan next steps. Executives are employing a number of strategies, including changing their mix of imports or passing on costs to consumers outright.
Coca-Cola, for instance, said it could shift its imports to rely more on plastic bottles if aluminum cans become more expensive. Fragrance company Coty said it has boosted US inventories and is increasing production of fragrances in North Carolina.
Ford is considering areas in which it can build up inventory to prepare for potential 25-percent tariffs on imports from Mexico and Canada, executives said Tuesday. Trump planned to initiate those duties earlier this month, before delaying them until March.
General Motors said it cut inventory in its international plants by 30 percent to 40 percent before Trump’s Jan. 20 inauguration.
Plan to pass on
However, if suppliers are affected, that could hit the automakers as well. Global auto supplier Autoliv told Reuters that it plans to pass on increased costs due to tariffs to the car manufacturers, “which will likely result in higher car prices in the end.”
Toby Gauld, president of Optima Aero, a Canadian-based company with divisions in the US and France that supplies used parts for helicopters, said he is holding off on a $500,000 purchase from the United States due to concerns over possible tariffs and retaliatory duties since the equipment will not be available for eight months.
“Eight months from now is a lot of uncertainty,” he said.
Across-the-board tariffs against all aluminum and steel would leave companies without the option of shifting imports from countries with lower US duties. Trump’s goal is to boost US output of aluminum and steel, industries the nation once dominated. US demand for aluminum in 2024 was 4.3 million metric tons, and it imported 3.7 million metric tons, according to federal data.
Chicago-based Century Aluminum, which operates several US aluminum smelters, said it strongly supports tariffs. “President Trump’s decisive action will protect national security and help level the playing field for America’s aluminum workers,” said Century CEO Jesse Gary. The company’s stock rose 6.5 percent on Tuesday.
But some US companies urged Trump to consider the long-term effect of tariffs on the metals industry.
“There needs to be a long-term strategy to increase the amount of aluminum produced in the US so we can be closer to self-sufficiency,” said Brian Hesse, CEO of New York-based PerenniAL, a privately held distributor of slab, wire rod and billet produced with aluminum used to make wheels, window frames and other products.
He said any price increase that PerenniAL faces due to tariffs would ultimately reach the average consumer, he said.
