>> Manufacturing is big business in Wisconsin. We're in the top
ten 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 Argonne
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 what has been the
immediate impact of the tariffs, especially for a company like
yours that imports 70% of the aluminum from Canada?
>> Right. >> 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 Roe Kohl are averaging 30% increases. And that that is
a huge burden that 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?
>> The 70, like you said, 70% of the aluminum comes from Canada.
You really don't have a lot of other resources. And you know,
we don't buy from Europe or China. And so if the 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 get 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 costs. >> 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 it along and they're not going
to hold the pricing. And you know the consumer is going to
pay the tax. It's 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 that we can't
afford to. You know, 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 he 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.
>> So 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 u. >> 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, a 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 this could stop that
growth. >> What is your message then to
the administration. >> To 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 going to increase costs for
everyone. And then we are going to 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 we have uncertainty
on tariffs, praises on, it creates uncertainty on customers
buying. If you don't have certainty of the industry of
what you're doing, they're going to 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.