Missouri nail manufacturer struggles under steel tariff | St. Louis Public Radio

Missouri nail manufacturer struggles under steel tariff

Jan 2, 2019

Trump-administration tariffs on imported steel and aluminum imposed last June were intended to boost U.S. production, create jobs and investment in American manufacturing. The impact has been just the opposite at the Mid Continent Steel and Wire company in southeast Missouri.

“We are suffering,” said Chris Pratt, Mid Continent’s general operations manager. “Our company is losing money every month, our employment is down 200 employees since June, and our sales are off 60 percent.”

Mid Continent was thrust into the national spotlight last summer when then-Sen. Claire McCaskill, D-Missouri, called the nail and fastener factory in Poplar Bluff, Missouri, one of the first victims of the Trump tariffs.

Soon after the tariffs were announced, Mid Continent laid off 80 non-contract employees, citing the rising cost of importing steel as a reason. Pratt said an additional 120 employees have quit the company since June due to fears the factory would be forced to close. Before the tariffs, Mid Continent had 500 employees.

Mid Continent Steel and Wire is located in Poplar Bluff, Missouri, in Butler County. The company manufactures half of all American-made nails and sells them in the U.S. exclusively.
Credit Mid Continent Steel & Wire

Mid Continent is one of the few remaining American manufacturers of nails; it makes 50 percent of the nails produced in the U.S., under the Magnum brand name. Yet it’s not American-owned: a Mexican company acquired Mid Continent in 2012.

According to Pratt, the new parent company invested millions in the Missouri facility, doubling its size, creating new jobs and a plan for continued growth. He said those facts alone made Mid Continent an excellent candidate for exclusion from the 25 percent tariff on imported steel.

Pratt has been counting the days since he applied for the exclusion — now more than 200 — as he continues to wait for an answer from the Department of Commerce.

“We are the poster child for exclusion process,” Pratt said with some exasperation in his voice. “I don’t understand why we haven’t be granted the exclusions.”

The Department of Commerce has been inundated with exclusion requests and changed the application process in September. The latest data is not available on the department’s website due to the government shutdown.

Despite the waiting, losses in sales, revenue and employees, Pratt said he has hope that the Trump administration will provide some relief soon.

“We are an unintended consequence,” Pratt said about the negative impact of the steel tariffs.

“The 232 tariffs were not put in place to harm companies like Mid Continent Steel and Wire,” he added. “Maybe it wasn’t fully thought out what the ramifications would be for the downstream manufacturing facilities like ours and others.”

Relief could come if and when Congress approves the new U.S.-Mexico-Canada Agreement on trade. Mid Continent would benefit from tariff-free steel imports from North American neighbors.

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