TARIFF TREPIDATION Times Uncertain Face Aluminum with Steel, That Work Businesses and Ashortage
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www.thebusinessjournal.com UPDATED DAILY MARCH 30, 2018 thebusinessjournal.com the FOCUS | 8 TARIFF TREPIDATION Businesses that work Technology Geekwise’s homegrown with steel, tech scene aluminum the EXECUTIVE face PROFILE | 9 uncertain times PHOTO BY DAVID CASTELLON | Frank Mendez cuts a pipe from a section of a 32,000-gallon stainless steel tank under construc- tion at Sanitary Stainless Sam Hansen Welding, Inc. in south Director of Marketing Fresno. Company officials say that U.S. tariffs on steel Fresno Grizzlies imported from most countries has sparked a run on existing steel that has resulted in higher prices the LIST | 12 and a shortage. Ruiz Food Products tops the Food Processors list Before imposing the tariffs across the tries that include Japan, Russia and China David Castellon - STAFF WRITER board last Friday, President Donald Trump’s raised worries about triggering trade wars administration granted temporary exemp- that could hurt foreign demand for U.S.- Manufacturers and others across the tions to U.S. allies Canada, Mexico, Austra- manufactured goods and higher prices for This Week Online 6 Valley were just starting to get a handle lia, Argentina, Brazil, South Korea and the consumers. Then the president essentially last week on the potential effects from Leads 10-11 28 countries in the European Union, giving doubled down, announcing additional 25 the president’s decision to slap heavy tar- them until May 1 to negotiate new trade percent tariffs on up to $50 billion worth of People on the Move 17 iffs on foreign steel and aluminum when deals that the administration considers Chinese goods imported here. Public Notices 18-29 the White House shifted the ground under fairer for the U.S. them again. Opinion 30 The tariffs that were imposed on coun- Tariff | 2 Food Commons Fresno Bouncing back to the top issues call for investors How Terance Frazier rose to prominence in Fresno’s real estate scene CONTRIBUTED | Renderings show the plan for Food Commons Fresno to build a community food hub in Southwest Fresno by 2020. EDWARD SMITH | Terance Frazier meets with Fresno State students like Tyler Puccio at the Student Union for an event where he told future entrepreneurs about what it took for him to Jose Diaz - CONTRIBUTING WRITER get where he is today. Edward Smith - STAFF WRITER Food Commons Fresno’s di- to expand the food commons rect public offering will help business model within Fresno the organization address issues to include what we have now; When Terance Frazier saw “In order to get the people in inequality, access to food the farm, the distribution of hundreds of people partying in here, you have to bring the ex- and wages while expanding the food and many different chan- a Downtown Fresno alley last citement,” Frazier said. business and building a com- nels, including retail, and the week before the Fresno FC soccer The long-term work of busi- munity food hub in Southwest direct-to-consumer business match, it meant that his forecasts Fresno. for downtown revitalization were Frazier | 5 “It has always been our intent Food Commons | 4 coming true. SENSITIVE TIME PRIORITY HANDLING PERIODICAL: FRIDAY, MARCH 30, 2018 ISSUE # 325370 | $1.25 PER COPY USPS 145-100 2 www.thebusinessjournal.com FRIDAY, MARCH 30, 2018 LOCAL BUSINESS LENDING. We roll up our sleeves to deliver smart business financing solutions. • Business loans and lines of credit1 • Commercial real estate financing1 • Equipment loans and leasing1 • SBA Preferred lending2 PHOTO BY DAVID CASTELLON | A forklift operator moves a role of heavy stainless steel used to make storage tanks, mostly for the wine industry, at Sanitary Stainless Welding, Inc. in south Fresno. Tariff | from 1 and other items. If U.S. steel foundries got back on their feet and could produce enough China, the world’s second largest higher-grade steel to meet the added economy after the U.S., responded by RabobankAmerica.com/BusinessFinancing demand, “That would be great,” Betts threatening tariffs on a laundry list of said. Call your local Business Banking specialist to ask about our special financing offer. U.S. goods, including 15 percent tar- Samone Shafer Kathleen Kelly iffs on nuts, fruits and wines. 559-447-7926 559-786-6185 Price run-ups [email protected] [email protected] That’s a matter of particular con- A lot to take in Merced and Fresno Counties Kings and Tulare Counties cern at Sanitary Stainless Welding, To say the least, it has been a lot for Inc., a Fresno maker of stainless steel businesses to take in, said Mike Betts, tanks as big as 640,000 gallons for 1 2 CEO for Betts Company in Fresno, a All loans subject to credit approval. Certain restrictions apply. All loans subject to SBA criteria and approval. wineries and other industries, maker of truck and trailer parts and “We use a lot of steel,” along with accessories, as well as chairman of the aluminum to make stairs and catwalks San Joaquin Manufacturing Alliance. to walk up and around the tanks that “Trump has plenty of data that Chi- can be a few stories high, he said. na is an uneven player on the field, Though his company buys only manipulating currency and flood- U.S.-produced steel, he said discus- ing the market” with steel and other sions by White House staff about the goods, sometimes at rates cheaper FRESNO DISTINGUISHED CITIZEN DINNER metal tariffs over the past several than it costs to produce them, Betts weeks triggered a run on steel sup- said. plies that pushed up the prices his “This tariff thing, it’s really un- company pays for steel by 5-10 per- known what the efforts of the Trump cent a month before Trump imposed administration are going to do,” along the tariffs, said Curtis Stonehocker, with exactly how China and other business development manager for HONORING countries may react, which in turn Sanitary Stainless. makes unclear the potential effects Since then, speculation in the in- on manufacturing here, said Betts, dustry is steel prices may rise 15-25 Dr. Bill F. whose company is a heavy steel user. percent compared to prices before A big reason for the uncertainty is the run, he said. that over the past couple of decades, Stewart “Grabbing up all that existing [steel] U.S. manufacturers have moved away has created a shortage,” added Ed- from using U.S.-produced steel be- ward Duarte, general manger of Sani- cause foundries weren’t investing in tary Stainless. new technologies to make higher- “Better get in line if you want a tank. grade alloys, whereas foundries in Join us in saluting Dr. Bill F. Stewart for his dedicated service to There’s a run on the market,” as peo- Asia and Europe were making those ple try to buy steel cheap before the the community and Scouting! investments, he explained. full jump in prices take effect.” With the tariffs, companies that Last week’s announcement of fur- normally buy steel and aluminum Pardini’s ther tariffs on China and its retalia- forged in the countries on which the tory threat have given businesses no Fresno, California tariffs are imposed will either have to breathing room to assess the further pay the added costs to import here — potential effects on their respective 10 percent tack on for aluminum and Thursday, April 19, 2018 industries, Stonehocker added. 25 percent for steel — or try to buy the “It puts our suppliers at a loss of metals cheaper from foundries in the Reception 6:00 pm – Dinner 7:00 pm what to do. They don’t know where U.S. or the exempted countries. this will land,” he said. “The whole in- That sudden shift in demand is likely dustry is in disarray until we work it to drive up steel and aluminum prices out.” PURCHASE YOUR TICKETS NOW in those exempted counties anyway, At Screw Conveyor Corporation in and there are concerns whether those Visalia, a manufacturer of bulk ma- PURCHASE TICKETS ONLINE AT: www.seqbsa.org/fdcd foundries would be able to keep up with the added demand, particularly OR CONTACT JOHN RICHERS AT: (559) 320-2100 • [email protected] for producing high-grade alloys cru- cial to making some machinery parts Tarrif | 3 FRIDAY, MARCH 30, 2018 www.thebusinessjournal.com 3 Serving the Valley for over 26 years Motorola Two-Way Radios Built for the toughest situations PHOTO BY DAVID CASTELLON | Michael Cruz, president of Tioga-Sequoia Brewing Co., in Fresno, stands next to a pallet of blank, unfilled aluminum cans. Like many manufacturers, he doesn’t know how U.S. tariffs on steel and aluminum from most foreign suppliers will add to what his company currently pays for cans and, consequently, how much more consumers may end up paying for his beer. passed on to consumers, Cruz said. Tariff | from 2 “One or two cents is still a lot of 559.435.6619 money. Then you’re talking a quar- ter to 50 cents a case,” he explained. terial handling equipment, Produc- “You add that over thousands of cases, 3733 S Bagley Ave Suite C tion Manager Adolfo De La Rosa said yeah, that could be something.” the cost of the steel his company buys Fresno, CA 93725 already has gone up 30 percent com- ‘A bad idea’ pared to the start of the year. “As a general idea, tariffs are a bad “The market is volatile right now,” idea,” said Andy Quady, manager he said, “We have to play it by ear and of Quady winery in Madera. “What see where it lands. We want to make about all the people that work with sure we get raw material costs before steel? What about all the things that we move on with any projects.” are made of steel? All these people are going to have to pay more money be- Bottles and cans cause of this.” The Problem the Prospect Brings Michael Cruz, president of Tioga- With uncertainty of how the af- Sequoia Brewing Co., in Fresno, said a fected countries may respond to the You is Never the Real Problem meeting three weeks ago with his alu- U.S.-imposed tariffs remaining, indi- minum can supplier to discuss how cations that the U.S.