WASHINGTON D.C. (MONET) – The last major U.S. nail manufacturer – located in southeast Missouri – could be out of business by Labor Day. George Skarich of Mid Continent Nail Corporation in Poplar Bluff says President Trump’s 25% tariff on steel imports is pricing the company out of the market. If it closes, about 500 workers would be on the unemployment line in a region already suffering from serious economic hardships.
“Cheap nail imports from China and other countries don’t face this tariff and are increasing every day. We need our wire to be excluded from this tariff or we will have to increase the layoffs we’ve already begun,” Skarich says.
Mid Continent Nail Corporation is one of the largest employers in Butler County and the second largest one in Poplar Bluff. It launched in 1987 under the direction of David Libla and Republican State Senator Doug Libla of Poplar Bluff.
In a live Missourinet interview last week, Libla indicated he was working on the tariff issue but he did not provide specifics.
During a U.S. Senate Finance committee hearing today in Washington, U.S. Senator Claire McCaskill, D-Missouri, says the manufacturer has already endured severe losses.
“The company has 500 workers in a town of only 17,000. They’ve now laid off 60 of their 500 employees,” she says. “They’ve idled their most sophisticated production facility in Poplar Bluff. They are expected to cut 200 more jobs by the end of July and the company that has visited with us at length believes they’ll be out of business by Labor Day.”
A closure would be a drastic shift from the company’s 2015 expansion that included the addition of a new line, the hiring of nearly 100 workers and $5 million investment.
According to McCaskill, the manufacturer produces about 50% of the nails made in America.
“So far, in response to the tariff, they have lost almost half of their business in one month due to price,” McCaskill says. “They went from an average of 9,000 tons of nails sold every month. In June, that dropped to 5,500 (tons). In July, the company will sell fewer than 4,000 tons. The customers can easily source nails manufactured in other countries.”
Some U.S. companies, including Mid Continent Nail Corporation, are seeking tariff exemptions if they can’t get the goods they need from a domestic metals supplier. The U.S. Commerce Department is experiencing a huge backlog – leaving many of the companies in a major predicament.
During today’s hearing, U.S. Commerce Secretary Wilbur Ross says the department has so far received more than 20,000 requests for product exemptions. Of those, 98 requests have been processed, 42 exemptions have been approved and 56 have been denied. McCaskill railed against the department’s red tape.
“In a chaotic and frankly incompetent manner, you’re picking winners and losers on a very technical basis, according to all the reporting we have, without a great deal of training,” McCaskill says. “The regulatory burden is so extreme on small businesses. Many of these companies are filing dozens of waivers based on having to file a different one for every slightly different product. You are requiring that these waivers be filed every year.”
Ross says the Commerce Department was working through the backlog of exemption requests and disputes claims that the process is chaotic.
Mid Continent Nail Corporation is seeking 24 exemptions but McCaskill says they likely wouldn’t be granted in time to save the business.
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