One aluminum industry executive believes smaller U.S. manufacturers, who are laying off workers and cutting production, are blaming the Trump administration’s trade policies to deflect attention from their own bad management.
Braidy Industries founder Craig Bouchard is one of a handful of U.S. business leaders who are vocal supporters of the White House’s 10 percent tariff on aluminum imports. Executives at AK Steel, Nucor and Steel Dynamics, which have all seen profits rise as a result of a 25 percent companion tariff on steel imports, have also praised Trump’s use of national security concerns to prop up the metals industry.
The top executive of several businesses over the past two decades, Bouchard disagrees with the views of Republican lawmakers, economists and others who argue the new duties will undermine a growing economy spurred by, among other things, the GOP-led tax cuts last year.
He reasons that the U.S. has been at a competitive disadvantage for years because of global tariffs on American goods, an argument Trump routinely employs to defend his trade agenda, which has led to conflict with allies and competitors.
Despite the intense rhetoric, some business leaders are giving credence to that argument as it pertains to China and are willing to give the administration leeway to try to negotiate.
“To a significant degree, the vast majority in the business community realize that this is a fight that has to be fought,” Russell Price, chief economist with Ameriprise Financial, said in a recent interview. “This isn’t going away until it’s resolved.”
The tariffs on Chinese imports were particularly beneficial, Bouchard says, given the communist nation’s practice of flooding the U.S. market with aluminum. He believes the tariffs — which the administration has also levied against partners like the European Union, Canada and Mexico — are only part of a larger negotiation intended to make the international trade environment more fair to the United States.
“If there’s a trade war, generally, we are going to win it,” Bouchard said in an interview with the Washington Examiner. “It will end up with more fair trade practices around the world.”
Braidy Industries, which is gearing up to open a $1.6 billion aluminum rolling mill in Kentucky in 2020, isn’t materially affected by the tariffs or the international retaliation because the facility hasn’t yet begun production. Along with the mill, Braidy Industries owns a high-strength aluminum alloy manufacturer that was begun in a startup incubator at the Massachusetts Institute of Technology.
Bouchard’s enthusiasm for Trump’s tariffs isn’t shared by corporations such as Caterpillar, General Motors and Ford Motor Co. , which warn that the duties may lead to higher prices and lower profits in the second half of this year. Smaller businesses say the charges are to blame for job and productions cuts.
Winnsboro, S.C.-based Element Electronics, for example, on Tuesday joined a slew of businesses in announcing layoffs. The consumer electronics provider said it would close an area plant, eliminating 126 jobs, according to The State newspaper.
Bouchard says the companies are just using the tariffs as a scapegoat.
“I honestly don’t buy it, I don’t buy it all,” he said. “I haven’t personally seen one company, that is a material company of any sort, where that was the case.”
There are a few areas where Bouchard breaks with Trump. He doesn’t support providing bailouts for specific industries impacted by the tariffs and urged the administration to exempt some car manufacturers from a possible 25 percent levy on auto imports.
“I personally would be in favor of waiving tariffs that apply to those companies that are very large investors already in the United States,” Bouchard said.
The new Braidy Industries plant is designed specifically for the auto industry, and Bouchard, who has faced scrutiny over his past business practices, said it has presold 200 percent of its production capacity.
The privately held company received a $10 million tax break from Kentucky for the building, and the state also made a direct investment of $15 million.
