Government Shutdown a Is Double-Whammy for Nail Maker Hit by Tariffs

(Bloomberg) -- The government shutdown is adding to the woes of U.S. companies already paying tariffs for their steel and aluminum.

Mid-Continent Steel and Wire warned in October that President Donald Trump’s tariffs on steel and aluminum will force them to continue cutting workers. Chris Pratt, the company’s general manager, now says the partial government shutdown is causing even more pain.

With the U.S. Commerce Department largely unmanned, the nail maker can’t get an answer on the tariff exemptions they’re seeking, he said in a telephone interview. Mid Continent, owned by Mexican steel company Deacero, imports about 75 percent to 80 percent of its raw materials from Mexico, with the remainder coming from domestic manufacturers.

“We’ve gotten no answers on the 24 exclusions requests we filed on behalf of Mid-Continent, so we’re still paying the tariff, still struggling to keep orders, because our price is not competitive against our import competition” Pratt said. “We have been given no indication of whether we were close to receiving our exclusions, and now it’s being delayed by the shutdown.”

In October, Pratt told reporters on a conference call that he was in contact with Nucor Corp., the biggest American steel producer, which said they could only supply 10 percent to 12 percent of the company’s monthly needs.

It’s another example of how government policy is affecting American manufacturers that Trump promised to help during his campaign, but are now suffering from higher costs and uncertain demand prospects. Pratt says they are down 200 workers and are operating at about 60 percent of the business they were doing before June.

“The government shutdown is doing nothing but kicking us while we’re already down,” Pratt said.

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