Canadian aluminum tariffs hit Tampa Bay area manufacturing sector

TAMPA, Fla. - A 50% tariff increase on Canadian aluminum imports is hitting Tampa Bay manufacturing companies with surging costs and market uncertainty, industry leaders warned.

Tampa Bay aluminum costs

What we know:

Rising trade tariffs between the U.S. and Canada are impacting the Tampa Bay area manufacturing companies. While Tampa-based Southern Manufacturing Technologies uses U.S.-made rolled aluminum, SMT president Roy Sweatman explained that 60% of melting to make aluminum takes place in Canada, because costs are far lower there.

"If we're quoting a new part or a part that we've made before for a new purchase order, we'll factor the cost of the material into those pricing. We have a long-term agreement, so a very big part of our parts, we have three five-year agreements at fixed prices," said Sweatman. "We have some clauses in place where it exceeds a certain amount, then we can get a price increase from our customer. But up to that point, we have to absorb it ourselves."

Sweatman said they do have one customer that's trying a unique approach where a network of distributors would sell us the aluminum at pre-tariff prices and the customer would absorb the difference. The local manufacturer relies heavily on aluminum to produce components for defense applications and aircraft, including Boeing 737, Airbus, and K-320 planes. 

He noted that companies faced similar hurdles during the first Trump administration, but the current 50 percent rate presents a much steeper hurdle.

Higher flight costs

What we don't know:

Sweatman anticipates that airline ticket prices may increase as a result of rising parts costs. But it remains unclear what consumers will see and how long the 50% tariff will remain in place.

"It rolls up to where it's going to affect their ticket prices on airplanes. It’s going to affect the defense budget because of the extra cost of the parts that go into missile systems," said Sweatman.

Local trade impact

What they're saying:

Addressing the company's outlook, Sweatman added, "We'll get through it one way or the other. It's not going to be something that's going to kill us. But it's going certainly affect us, and we're going to have to do all the things we can to cut other costs than that to make up for it."

The Bay Area Manufacturers Association president Beth Galic sent a statement saying, "From our perspective, this is really about uncertainty for local manufacturers. Steel and aluminum are essential inputs for so many of our local manufacturers, and when tariffs go up, those costs don’t just disappear. They can affect pricing, production decisions and ultimately our ability to compete." Galic went on to say, "We’re watching this closely and hoping for some stability, because manufacturers need to be able to plan ahead and know what their costs are going. They need to know what their costs are going to look like."

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