Tariffs on Steel Have Brought the Largest American Nail Factory to the ‘Edge of Extinction’

Of the 500 workers employed at the Mid-Continent Nail factory in the U.S. state of Missouri, 60 were laid off last week due to the increased price of steel. Factory leaders blame this situation on the 25 percent import tariffs on steel, which have caused demand for nails to drop by 50 percent after the factory was forced to raise prices due to higher procurement costs.

The factory faces closure by Labor Day, which is celebrated in the U.S. on the first Monday in September, unless the government’s Trade Agency grants them an exemption from paying tariffs, said company spokesperson James Glassman to CNN.

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He adds that the company could relocate its production to Mexico, where they would buy steel without paying tariffs, and then import finished nails back to the U.S. since tariff payments only apply to raw materials, not finished products.

Glassman called Donald Trump’s trade policy misguided, emphasizing that the company has doubled its workforce since 2013 and increased its business volume despite strong competition from China.

About 21,000 American companies have requested exemptions from paying tariffs, and the U.S. Chamber of Commerce has estimated that 2.6 million jobs in the U.S. are at risk due to strict trade policies, although this estimate also includes the impact of the U.S. exit from NAFTA. According to Moody’s Analytics, around 700,000 people could be unemployed by next summer due to tariffs.

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Trump won 80 percent of the votes in the state of Missouri during the presidential election, but Glassman points out that it is questionable whether his fellow citizens still support Trump, adding that the factory workers have reason to be dissatisfied with Trump’s administration.