A Company Owner Asks His Customers for Understanding—and Help—After Raising Prices in the Wake of Trump’s Steel Tariffs

On July 2nd, a month after the Trump Administration imposed a twenty-five-per-cent tariff on steel imported from Mexico, Canada, and the European Union, Stuart Speyer sent a carefully worded letter to his customers. Speyer is the president of Tennsco Corporation, a “storage and filing solutions” manufacturer based outside of Nashville, in Dickson, Tennessee. ”Ninety-nine per cent” of the steel that Speyer buys, he recently explained to me, is manufactured by domestic suppliers, including Nucor. This year, Nucor posted second-quarter profits twice as large as those it made during the same period in 2017—and 2017 had already been a great year for the steel business. Trump’s tariffs on imported steel are helping Nucor and others keep their prices high: a boon for steelmakers but a major concern for steel consumers like Tennsco.  Steel usually accounts for a third of Tennsco’s manufacturing costs—though, for some products, it’s closer to half. Last year, Speyer said, he bought forty thousand tons of steel. “For every penny the price of steel goes up per pound, we pay eight hundred thousand dollars more for steel annually,” he told me. “And now we’re talking a fifteen-cent increase for hot roll and ten cents for cold roll”—the two types of steel he uses. “The cost we have to largely pass on is over ten million dollars. We can’t absorb it.”The letter that Speyer sent out in early July announced “a fairly substantial increase, a double-digit increase,” as Speyer described it to me, of the price of Tennsco’s products. But he also wanted his customers—many of whom he’s had for years—to understand the cause of his price increases, and what it would take for prices to come back down.