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Washington — Shares of automakers Ford Motor Co. and General Motors Co. declined Friday after the U.S. Commerce Department recommended stiff tariffs for imported steel and aluminum that could increase the cost of building cars.

Commerce Secretary Wilbur Ross recommended a 24 percent global tariff on steel imports and 7.7 percent tariff on imported aluminum. President Donald Trump is expected to make a decision on the recommendations from Ross by April.

Ford stock closed down 1.4 percent by the close of trading Friday on the New York Stock Exchange, and GM fell 1.8 percent. Fiat Chrysler Automobiles stock was unchanged for the day.

Charles Chesbrough, senior economist and senior director of industry insights for Cox Automotive, said an increase in steel and aluminum tariffs will be “a net negative” for the automotive industry.

“At best, it adds uncertainty to automotive supply chain – who/how will other countries retaliate is unknown and thus make longer-term planning more difficult,” Chesbrough said in an email. “At worst, it could force higher prices for manufacturers that would be passed along to vehicle buyers which would negatively impact market demand.”

The Commerce Department said Friday its proposals are “intended to increase domestic steel production from its present 73 percent of capacity to approximately an 80 percent operating rate” and “raise production of aluminum from the present 48 percent average capacity to 80 percent.”

Ford said in January that it expected that it is expects to see a decline in its profits from the $1.78 per share it earned in 2017 due to higher commodity prices in 2018. GM has projected that its 2018 adjusted earnings per share will be similar to last year’s result, when it reported earnings of 22 cents per share.

Two groups that lobby for the manufacturing industry predicted the proposed tariffs “would devastate downstream U.S. steel-consuming manufacturers who employ 6.5 million Americans, compared to the 80,000 employed by the domestic steel industry.”

“If these tariffs are imposed, the U.S. will become an island of high steel prices resulting in our customers simply importing the finished part and threatening thousands of jobs across the United States in the steel-consuming manufacturing sector,” Roy Hardy, President of the Precision Metalforming Association, and Dave Tilstone, President of the National Tooling and Machining Association, said in a joint statement.

“The last time the U.S. imposed steel tariffs in 2002, more than 200,000 American jobs were lost because of high steel prices due in large part to the tariffs,” they continued. “We urge President Trump, who campaigned to protect U.S. manufacturing jobs, to reject these recommendations by the Commerce Department to avoid devastating the U.S. manufacturing sector.”

Steel stocks soared: U.S. Steel shares closed Friday up 14.7 percent, while AK Steel was up 13.7 percent.

Century Aluminum Co. rose 8.3 percent. Alcoa, which has worldwide operations, declined 0.4 percent.

klaing@detroitnews.com

(202) 662-8735

Twitter: @Keith_Laing

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