Zekelman Industries, a Chicago-based steel pipe and tube manufacturer, announced yesterday that each of its employees would receive a $1,000 bonus after President Donald Trump‘s steel and aluminum tariffs go into effect.
“We think there are great days ahead, and we wanted to share it with all of our people,” Mickey McNamara, executive vice president of Zekelman Industries, told CNBC during “Closing Bell.” “We think [the tariffs are] going to have a tremendous impact for us and for the entire domestic steel industry.”
On Thursday, the president announced his proposed tariffs — 25 percent for steel and 10 percent for aluminum — would go into effect next week. He said the tariffs were in response to national security risks.
Zekelman Industries, which has sales exceeding $2.7 billion each year, said the bonuses would be distributed after the tariffs are implemented and again each year on the anniversary of the tariffs, as long as they remain in effect.
“If something happens and this falls through, then we’d have to revisit the situation,” said McNamara, who said he’d be disappointed if the deals don’t go through at all.
“President Trump has made some promises to our industry,” said McNamara, who also serves as president of the company’s Z Modular. “So far to date he’s stood behind those promises. These tariffs are the latest example of that, following the tax cuts.”
“We’re excited about the opportunities that we think this tariff is going to create for us,” McNamara said.
But not everyone is excited about the tariffs.
Ravin Gandhi, CEO of GMM Nonstick Coatings, calls the bonuses Zekelman is giving out “awesome,” but said he is “nervous” about the tariffs.
“It distorts free market,” Gandhi said during “Closing Bell.” His company supplies the cookware, bakeware and electrical industries.
Gandhi worries that operating costs will increase with the tariffs, pushing up consumer prices.
“The question is, ultimately, who is buying these products?” he said. “It’s Americans. We’re a country addicted to low prices and consumption. … This is why I think tariffs don’t work.”
“When prices across the board go up,” Gandhi said, “the market could go down potentially far and could put us into a recession, which I hope does not happen.”
While McNamara said there will likely be a “curving” of imports, “it’s certainly not going to knock imports out of the market. …. It’s going to grow our market.”
“The effect on the consumer of increased steel prices is nominal to negligible,” he said.