Last week, President Donald Trump announced that he was going to impose 25 percent across-the-board tariffs on imported steel, alongside a 10 percent tariff on aluminum. While there's been public pressure on the president from many corners, including his fellow Republicans urging the president change his mind, the administration has been steadfast. Today, press secretary Sarah Huckabee Sanders announced that the president plans to sign the tariffs by the end of the week, adding, "There are potential carve outs for Mexico and Canada based on national security, and possibly other countries as well."
While we don't yet know what the tariffs look like, there are already Steel CEOs and business owners who are issuing some words of warning. Lisa Goldenberg, CEO of Delaware Steel Co. based in Pennsylvania, is one such business leader and a regular guest on our show. Marketplace host Kai Ryssdal spoke with Goldenberg about how the tariffs may affect her company and the steel industry as a whole. The following is an edited transcript of their conversation.
Kai Ryssdal: I have to tell you when this news broke last week, everybody around here was like, "Oh, we've got to call Lisa! We've got to call Lisa!" And I'm like, "You know what? Let's just let this sit for a little bit and give her a chance to think about it, and then we'll get her on the phone." So here we are, on the phone —
Lisa Goldenberg: I have to tell you that wherever I go, people have been saying to me, "When's Kai calling you?" Strangers! I am in Arizona, and two people walked up to me in the lobby, whom I've never met, and said, "Are you Kai's steel lady?" So there you go.
Ryssdal: Well there you go. So now that we've got you on the phone— that's a great story — what do you think?
Goldenberg: Well, it's an exciting time. For my company, tariffs are a good thing, but I wear a lot of hats, as you and I have discussed. I think this is the kind of thing, what's good for the goose is not necessarily good for the gander. So when we talk about manufacturing, just to give a primer and take it back a step, traditional big steel mills where the steel is actually made, this is very, very good for Big Steel. There's manufacturers, and that's where we get into a tricky part. I sell into what we call nonresidential construction. So that's big-box stores and what you see in your community. Those prices on the goods that I sell the companies who manufacture product have gone up 30 percent overnight.
Goldenberg: And they will continue to rise. They will continue to rise.
Ryssdal: Are your clients coming to you, and saying, "Lisa, you're killing me here. I can't pay this. I'm going to have to pass this on to my customers"?
Goldenberg: Absolutely. Hundred percent. And when Wilbur Ross goes on television talking about the price for a can of Coke, I honestly — he's a guru, and I highly respect him in what he does. I have no idea of what he's talking about. I'm charging manufacturers 30 percent more in the last two weeks, and I will continue to raise that number. I will be in the market. I'm a warehouse, but I'm also a trader, so I pass on not all, but most of it as soon as I can, of the increase, "it" being the increase.
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Ryssdal: Are you, as the CEO of a steel company, are you hiring? Are you going to expand?
Goldenberg: Well, I'm cautiously optimistic. We will have a very strong quarter. This is once in a lifetime, this is where you make money. The question is, when this "falls apart," when this changes, I don't want to be left with extraordinarily high-priced inventory. So I need to be extra, extra cautious. Let's remember, there are no new tariffs. This is a conversation.
Ryssdal: Right. It sort of sounds like, when you're using words like "when this falls apart," it sounds like either you think these tariffs might not be all that they're going to be cracked up to be, or, like President Bush, they're going to go into place. There will be WTO conversations, and European retaliation, and they're going to be pulled back.
Goldenberg: Of course they're going to be pulled back, and they may be pulled back before they even happen. We will have tariffs. It might be a way to negotiate NAFTA. It's old and antiquated. Maybe this is a negotiation strategy. The president negotiates with a very big stick. So you go in with a lot of drama, people freak out, now you sort of negotiate. So at the end of the day, we will have tariffs. Do I think they will look like what's proposed? No, I do not.
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