Isle construction, canning
could see costs rise

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By Lyn Danninger
ldanninger@starbulletin.com

President Bush's decision to slap tariffs of up to 30 percent on a range of steel imports will likely raise prices on a variety of products, including cars and appliances. In Hawaii, there could also be some impact on several local industries.

As many as 60 percent to 65 percent of all new homes now being built in the state are framed with steel, said Ken Choate, executive vice president of Haseko Homes.

Those companies who use imported steel for home construction would be affected by the new tariffs, he said.

Choate said he is not sure how much imported steel is used in Hawaii construction, but said his own company would not be affected.

"Primarily it's domestic steel for us so I don't look for any drastic jump. But those using foreign steel exclusively would be affected," he said.

The state's remaining pineapple cannery, Maui Pineapple, could also be hurt by the decision.

Maui Pineapple President Doug Shenk has been following the issue for some time and has been watching and waiting to hear if the company could be granted an exemption from the tariff. The company applied to the federal International Trade Commission and the U.S. Department of Commerce to be excluded from paying the tariffs because of the economic hardship the fees would cause.

"The information is not clear yet. From what we know, the formal announcement could be made (today)," he said.

Without some relief, the company would likely face a 30 percent increase in its cost. That would translate to about $1 million in extra this year, Shenk said.

The company saves a considerable amount of money by importing the steel it uses directly from Japan.

"It's the way its handled and transported. It's much more efficient and the costs are lower," Shenk said.

If the company had to bring steel from the mainland, the only way to get it here would be via container and the company would have to hire someone to package and load the container prior to shipping.

Whereas when the material arrives from Japan, the steel coils are loaded right into the hold of the ship without being containerized. When it arrives in Kahului it comes out of the ship the same way and can be loaded onto the back of a flat-bed truck with a crane, Shenk said.

"If we had to use a U.S. steel maker, we would likely have been out of business a long time ago," he said.