Proposed steel and aluminum tariffs could take a toll locally

"It's going to be bad"

CHESAPEAKE, Va. (WVEC) -- Local steel and aluminum distributors are feeling financial pressure.

One Hampton Roads company, BMG Metals said they're not the only ones forced to hike their prices.

Alec Warren is the manager of the Chesapeake company. He said steel and aluminum cost increase is because of the President's proposed tariffs.

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"The US cannot supply its own demand," said Warren.

If the tariffs are implemented, then it would add a 25 percent tax on imported steel and 10 percent tax on imported aluminum.

Warren said the industry is competitive, and there is a mill shortage after cheaper products were purchased internationally.

The price increases, in addition to a shortage of mills, are already taking a toll on distributors in the U.S. Mills are even rationing their products.

"Some of the mills that we are reaching out to aren't calling right now because they don't know how fast the market is moving and they can't commit to a certain price on any given day," Warren said.

That means even more restrictions on sales.

"In the past, if you get something from my mill, in three or four weeks most likely. And now you're looking at 8 to 10 12 weeks or can't buy it at all," said Warren.

"It's going to be bad," said Vinod Agarwal, an economics expert at Old Dominion University. "You and I as taxpayers will pay for it."

Warren said the price of steel last fall was close to half of what it costs today.

As a result, distributors are still having to buy steel and aluminum internationally at a higher cost

"I'd say at least 25 percent of our customer base is someone that does work for Newport News shipyard or someone else,” Warren said. “It only gets passed onto them, and then who pays for ship repairs? The taxpayers."

Warren also said the tariffs could help create jobs because more mills will need to open. Warren has no idea how long that could take.