The Nucor Steel Company that has various plants located in different countries. The international company needs to explore ways of preventing implications of high tariffs on imports from China and Germany. Instead, the focus should shift on expanding plants in Brazil where tariffs on imported steel are exempted (Rapoza, 2019). The plants located in the U.S can avoid high taxes imposed on steel import from China and import steel from Brazil to be able to compete in the global market. The US government is using tariffs on steel as trade war resulting reduced profit margin for locally based firms; It proves fruitless when a firm imports steels imposed high tariffs resulting in higher domestic prices of the product.
The executives need to negotiate with the U.S trade affair department to review “section 232 to allow the local steel industry to capitalize on the loss caused by dumped importation policy. The firm in collaboration with other metal manufacturers should involve the government to recognize unfair world competition that is affecting U.S construction steel. The U.S should recognize high tariffs have significant implication importing country; thus Nucor may not be able to sell products to all parts of the world. As a result, Nucor can counter the impact of high tariffs by shifting production base from U.S China Germany and Brazil to maximize profits and compete with global companies operating in the same line of production.
The current situation of steel tariffs can stagnate firm operations both local and internationally necessitate the seeking legal framework or systems to advocate exemption of section 232 and create the conducive environment for steel business to operate both in U. S. and overseas. The steel firms like Nucor to should use lawmakers to demands for reasonable tariffs to safeguard local companies from possible collapsing.
Focus on sustaining its loyal customers from various parts of the world; the Nucor need to develop strategies that will ensure steel products are available in the market segment. They should ensure the customer can buy steel products from Nucor plants located in China and Brazil. Also, relocating and expanding operations in Germany, Brazil, and China still prove viable strategy to cut down high steel tariff entering the United States market. The possible escape route for U.S based firm for avoiding high tariff is the importation of steel product from countries exempted from such tariffs. Brazil is the ideal source of importing steel for U.S markets.
Imposing strict tariffs on imported aluminum and steel has a negative implication on the U.S based companies that rely on steel on industrial operations. Report s indicates declining numbers of steel-related industries in the United States. Averting the situations such as collapsing companies, short staffing and laying off workers due to a trade war, Nucor needs to restructure local plant and focus on creating awareness of the constraints high tariffs motivated a political ideology of control international trade. Nonetheless, Nucor should consider winning over the trade war; the organization can focus on strength and opportunities that will be critical for surviving volatility and attain better position and catch up with changing times that potential influences the business community (Walter, 2019).
Upon drafting impacts of the trade wars, the concern should be presented to the politicians to address challenges facing Steel firm in U.S (Lawder & Alper, 2019). The motion to be presented the Congress might need to find strategies that can be implemented to prevent entry of Chinese steel to U.S duty while at the same time consider local companies that require importation of steel a fair tariff. According to (Everett& Behsudi (2019), Steel firm may involve the political to combine force through legislation to prevent Trump, U. S president to impose tariff under section 232.
Everett, B., & Behsudi, A. (2019, March 27). Republicans warn Trump to back off economy-wrecking tariffs. Retrieved from https://www.politico.com/story/2019/03/27/trump-auto-tariff-republicans-1240519
Lawder, D., & Alper, A. (2019, March 27). ‘Don’t blink’ on Trump tariffs; steel CEOs tell U.S. lawmakers. Retrieved from https://www.reuters.com/article/us-usa-trade-steel/dont-blink-on-trump-tariffs-steel-ceos-tell-u-s-lawmakers-idUSKCN1R82NG
Rapoza, K. (2019, March 26). Here’s How Much Money The Government Is Making Off China Tariffs. Retrieved from https://www.forbes.com/sites/kenrapoza/2019/03/26/heres-how-much-money-the-government-is-making-off-chinese-tariffs/#546b626c7b7a
Walter, C. (2019, March 27). Tariffs And A Turkish Coup – How Manufacturers Win In The Face Of Uncertainty. Retrieved from https://www.forbes.com/sites/johnkotter/2019/03/27/tariffs-and-a-turkish-coup-how-manufacturers-win-in-the-face-of-uncertainty/#7b28e03a2770