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Industry Steels Itself For Tariff Impacts

With news that the Trump administration will proceed with tariffs on steel and aluminum from the European Union, Canada and Mexico, the foodservice equipment and supplies industry is bracing for price increases on materials and the trickle-down effect on sales. The tariffs—25% on imports of steel and 10% on aluminum—took effect June 1 and prompted swift, retaliatory tariffs on numerous U.S. imports ranging from motorcycles to maple syrup.

Imposing steel and aluminum tariffs against Canada and Mexico complicates talks to renegotiate the North American Free Trade Agreement, which started last year and had already hit roadblocks in May. The tariffs are likely to strengthen Canada’s and Mexico’s resolve to not back down on unconventional U.S. demands for Nafta, such as the elimination of international panels to resolve trade disputes and a new clause under which the pact would expire if not explicitly renewed every five years.

Commerce Secretary Wilbur Ross cited national security concerns for the tariffs. “Without a strong economy, you can’t have strong national security. The president’s overwhelming objective is to reduce our trade deficit.”

Officials from EU countries, Canada and Mexico—among Washington’s closest allies for decades—angrily dismissed the idea that their shipments threaten the United States’ domestic security. The protests were equally strong in Congress. “Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents,” said Sen. Ben Sasse (R-Neb.).

Trade talks with EU, Canada and Mexico will continue as the tariffs take effect. Other trading partners, including Argentina, Australia, Brazil and South Korea, have already negotiated voluntary export limits.

NAFEM, which strongly opposes the tariffs, released this statement: “The commercial foodservice equipment and supplies industry depends on a reliable, global supply chain to make quality products, effectively compete throughout the world, and employ thousands of people in North America. Tariffs have already complicated these business fundamentals through price increases and the unintended consequence of creating supply shortages, which may become more significant, constraining production of finished goods.”

The association continues to work with members and business partners, including the Coalition of American Metal Manufacturers and Users, to voice continued opposition to the tariffs.

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