JOPLIN, Mo. — By 9 a.m. Friday, Greg Scheurich already had fielded his fifth call of the day from a metals importer trying to determine how President Trump’s new tariffs would work.

“It’s really confusing, tough to understand,” said Scheurich, president of CNC Machine Products, a manufacturer of bearing components.

For Scheurich, the perplexing thing about Trump’s tariffs on imported steel is that, in the name of helping U.S. steelmakers, the president may be dooming some other American companies like his.

In the nation’s capital, the new import taxes are viewed as a turn by the U.S. toward economic nationalism as well as a chance for the president to deliver on a promise to his working-class constituency.

But for Scheurich, 69, whose production of industrial parts depends almost entirely on importing specialized steel from Japan and Sweden, the restrictions on foreign-made metals pose a direct threat to his business. Although the president insists that tariffs will force companies like his to “Buy American,” Scheurich confronts a more complex globalized reality.

“What people don’t understand about the steels I use is it doesn’t have anything to do with price. I’ve tried to find domestic sources,” he said. “I’m not importing it because of price. I’m importing it because of quality and (because) I can get it.”

Scheurich said he has to buy from foreign companies because decades of consolidation in the domestic steel industry have left few U.S. mills producing the high-quality steel he requires. The limited amount of American steel he can obtain too often has obvious flaws, he said.


The president’s 25 percent import tax will effectively cut Scheurich off from his steel suppliers and starve his business. CNC’s customers will buy their parts from manufacturers outside the U.S. rather than absorb his higher costs, he said.

“If they would give me options about where to go domestically – no problem!” he said. “I don’t think they understand; I got nowhere else to go.”

CNC is among scores of U.S. companies that depend upon foreign steel mills for specialized products they cannot obtain – or cannot obtain in sufficient quantities – at home. In the weeks ahead, they all will be lining up at the Commerce Department to seek relief from the president’s new trade barriers.

To endure a bearing’s wear and tear inside a construction vehicle, wind turbines and even a dental drill requires specific materials. The bars, tubings and forgings that Scheurich uses to produce his components are made of a specialized steel bolstered, or alloyed, with elements such as nickel or chromium to enhance their strength and corrosion resistance.

As the domestic steel-making industry has shrunk to a fewer number of companies, such specialized production has gotten squeezed. Only 7 percent of U.S. production is of alloy or stainless steel, according to Platts, a market research firm.

Oil pipeline companies, which need special gathering lines, casings and tubing made of alloy steel, have no choice but to look overseas, said John Stoody, vice president of the Association of Oil Pipe Lines.

“Higher production costs for a niche market subject to cyclical swings in the oil sector led U.S. producers to shift to more higher volume and reliable products and markets,” Stoody said via email.

The U.S. migration away from such specialized production has been spurred by intense import competition. The U.S. last year imported more than 6.3 million tons of steel alloy products, up nearly 75 percent since 2002, according to the Commerce Department. That is a far faster rate than steel imports overall, which rose 16 percent during the same period to 34 million tons.


Even as U.S. demand for such products was growing, the number of specialty steel producers in the U.S. has dropped by half since the 1970s, Denny Oates, chairman of an industry trade group, testified before a Commerce Department investigation last year. The industry blames dumping by foreign producers, especially from China.

“These producers have suffered from the problems of competition with subsidized and dumped imports, abetted by excess capacity abroad,” said Ron Lorentzen, a former Commerce Department trade official.

In November, the Commerce Department concluded that companies from Russia, Belarus and the United Arab Emirates were guilty of dumping carbon and alloy wire rod in the U.S. and assessed duties that exceeded 400 percent on some products.

The fortunes of Scheurich’s company rest upon one paragraph in the proclamation the president signed last Thursday, which authorized Commerce Secretary Wilbur Ross to establish a process for excluding from the tariffs any steel products “determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality.” The Commerce Department has until Sunday to determine how to adjudicate exclusion requestsn.

Today, Scheurich has enough inventory to cover the next few months, although less than he would like. He suspects his next shipment from Japan, due this week, will be smaller than usual.

“It’s a bump in the road, but it’s a big one,” he said of the tariffs while standing in his factory. “If I can’t figure something out, we could close her down.”

Along with his son, Jeff, the company’s vice president for manufacturing, Scheurich is banking on the notion that the tariffs are just the visible element of a presidential negotiating strategy.

“I’m hoping there’s something behind it, which I think there is,” said Jeff, alluding to Trump’s self-image as a master negotiator.

“We’re hoping,” Scheurich said.

“We’re hoping,” his son repeated.