I shot the tariff

It’s been a busy first month for the Oval Office pen, with President Trump’s arm likely experiencing tennis elbow with all the executive orders he’s signed in the first 30 days of his second term as leader of the free world.

Just weeks after sending shockwaves throughout the nation, including in the security industry, by pausing federal grants and loans (though the order was later rescinded), the president made headlines, and heads roll again on Feb. 10, signing proclamations to restore a 25% tariff on steel and elevate the tariff to 25% on aluminum, effective 12:01 a.m. ET on March 12.

In a fact sheet issued by the White House, it stated that the president is exercising his authority under Section 232 of the Trade Expansion Act of 1962 to adjust imports of steel and aluminum to “protect our national security.”

Specifically, the fact sheet noted the statute provides the president with authority to adjust imports being brought into the United States in quantities or under circumstances that “threaten to impair national security.”

In addition, the proclamation revokes the authority for the Secretary of Commerce to grant relief for certain products from the tariffs, stating that “the Secretary shall not consider any product exclusion requests or renew any product exclusion requests in effect” as of 11:59 p.m. EST on February 10.

As he signed the proclamations, Trump stated that his objective is to revitalize the domestic steel and aluminum industries, or as he put it, “It’s going to mean a lot of businesses are going to be opening in the United States.”

While that may be true, those countries impacted by these tariffs – some of which are close, geographically or otherwise, American allies – such as Canada and Mexico are not exactly seeing it that way. And we saw - or actually heard - evidence of Canada’s disapproval of these looming tariffs at the Four Nations hockey tournament last week in Montreal, when Canadian fans booed during the singing of “The Star-Spangled Banner” before the U.S. and Canada squared off on the ice.

How is the security industry reacting to these upcoming tariffs? The Security Industry Association (SIA) noted on its website that leaders in Mexico, Canada, and the European Union widely condemned the decision, calling it “not justified”, “unfair” and “unacceptable.”

SIA also pointed out that while the Trump administration asserts that the tariffs will protect America’s critical steel and aluminum industries by closing loopholes that have allowed for unfair trade practices and global excess capacity, businesses around the U.S. “have also warned about fallout from the tariffs,” with many manufacturers finding it difficult to plan next steps or determine if President Trump will follow through in March.

In a recent LinkedIn post, Rob Lydic, president of Wavelynx - a manufacturer of access control card readers and credentials - noted the “significant ripple effect’ that these tariffs would have on components of security systems.

“A 10% tariff on a $50 component, for example, adds $5 to the cost,” he explained. “This cost is then passed along the supply chain, and with typical markups, can translate to a much larger increase for the end consumer. These compounding effects can create significant challenges for businesses and consumers alike.” 

The reality is these tariffs, if they go into effect next month, could have a direct, adverse impact on the security supply chain, not only for manufacturers, but also integrators and distributors.

Whether it’s a loss of competitiveness in the market due to higher expenses, the lack of an alternative supply of critical system components, or possible job and investment losses in the U.S., the implementation of these tariffs could have far-reaching implications for businesses and the security industry as a whole.

When you have a moment, please go to our April news poll on our main website page and share your thoughts on how these planned and potential future tariffs will impact your business and the U.S. security industry.

We would love to hear what changes you may have to make in response to these tariffs, such as passing additional costs up the supply chain, moving production outside the U.S., adjusting operations to cover losses associated with higher production costs, or other actions.  

Trump calls the 25% tariffs on steel and aluminum products the next step in his America First Trade Policy. From the reaction we’ve heard and read thus far, it may be “America Last” when it comes to future security product imports.