Manufacturing is big business in
Wisconsin. We're in the top 10
states nationally, with the second
highest concentration of employees
in the sector.
The industrial machinery sector is
Wisconsin's largest.
So what do the 25%
tariffs on Canada and Mexico
steel and aluminum mean
for companies like Argon Industries,
which fabricates sheet metal
components for major companies
and imports 70%
of its aluminum from Canada?
We Ask Owner, Greg Clement.
Thanks very much for being here.
Yeah, good morning.
So what has been the
immediate impact of the tariffs,
especially for a company like yours
that imports 70%
of the aluminum from Canada?
So all our suppliers are getting the
material from Canada, and what's
happening is the aluminum has
gone up 30%,
stainless steel has gone up 100%,
and hot roll, cold roll are
averaging 30% increases.
And that is a huge burden.
That's just from January to March.
So do you continue to
buy from Canada or are you trying to
buy domestically or would that make
a difference?
Like you said, 70% of the aluminum
comes from Canada.
You really don't have a lot of other
resources and
we don't buy from Europe
or China.
And so if
the prices for
that metal, those metals,
has gone up to that extent,
what does it mean for you and
your business?
So luckily most of our customers
understand that materials have
passed through, so we're able to
re-quote it and raise
the pricing, but it typically will
delay and cause them not
to order as much as they had planned
because of the expense of the
material and the cost of the
material and what it does for their
end cost.
And so if their end costs
go up to that extent, what does that
mean downstream for
consumers?
So it's a tax on the consumers.
They're going to pass them along.
They're not going to hold the
pricing.
And the consumer is going to pay the
tax. On average, consumers will
pay $3,000 in
result of the tariffs per
year.
So we see you there,
sitting inside your operation.
What are the applications for your
sheet metal fabrications, and
what kinds of industries and
products?
Yeah, power generation,
dehumidification,
scaffolding, a lot of different
electrical enclosures,
controls, things of that nature.
And so again, your customers are
willing to pay more.
They don't want to, but they
understand that we can't afford to
swallow that kind of increase and
that we would just lose margin.
And so what does that do in your
mind to kind of the broader
economy, right?
If consumers are going to pay
an extra $3,000
and your customers might
be pulling back on how much they
buy, you know, what kind
of effect does that have?
Yeah, I mean, it's raising inflation
on the consumer,
and it will slow the economy down
temporarily if you can.
We're hoping that he could, you
know, solve these issues
and not have the tariffs.
But the problem is we don't
manufacture aluminum here,
so we have to buy outside.
So for me, the tariffs something
that we can't even manufacture
and then put that burden on the
consumer is wrong.
As to the domestic production
of aluminum, that
would seem to be what President
Trump and his administration
wants as a result of these
tariffs. But how likely is it
that the U.S.
could ramp that up?
To build a mill,
especially aluminum mill, is very
costly and would take a long time.
I mean, you're talking, he'd be out
of the office by the time anything
came online.
So the Fed is signaling
about an economic slowdown,
possibly a recession, on
top of everything that's happening
now. How concerning is
that?
It's very concerning.
We're going to have a record year
this year.
Based on our customers' excitement,
forecasts, and they're all growing,
and this could stop that growth.
What is your message then to
the administration?
Let's not tear up something that we
can't produce in the United States.
Let's not add burden, but
he's talking about cars and
even aluminum goes everywhere.
And it's just gonna increase cost
for everyone and then we are gonna
have to pay that 25%.
Do you feel as though, do you feel
as though that message is being
heard?
I don't think it is.
I think he has a different end game
and it would be nice to know what
his end game is because the other
thing, have uncertainty on
tariffs creates
uncertainty on customers buying.
If you don't have certainty of
the industry of what you're doing,
they're going to wait and delay.
Well, we will see how this goes and
we wish you luck and thanks very
much for joining us.
Yeah, thank you for having me.
For more on this and other issues
facing Wisconsin, visit our website
at PBSWisconsin.org and
then click on the news tab.
That's our program for tonight.
I'm Frederica Freyberg.
Have a good weekend.
Thank you very much.