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Central Valley Businesses Already Feeling Impact of Trump’s Tariffs

MODESTO -- President Donald Trump’s tariffs on steel and aluminum are already having a huge impact in the Central Valley.

Donald Wenstrand at Modesto Steel has been in the business for 45 years and says the industry is typically filled with unpredictability. But the president's new call for a 25 percent tax on steel is creating volatility that changes the market every day.

"The very next day, which was a Friday, many of our vendors refused to even offer a quote," Wenstrand told FOX40.

Wenstrand's business serves as a middleman between steel mills and businesses like Foster Farms and Gallo Winery.

"I’ve experienced a wide variety of ups and downs," Wenstrand said. "This obviously is not my first rodeo, but I'm 74 years old and I really didn’t  expect to have to deal with something as interesting as this at this stage of my life."

The tariffs signed by President Trump don’t take effect until next week, but the looming 25 percent tax on steel and 10 percent on aluminum from countries other than Canada and Mexico have Wenstrand constantly surveying the market.

"This situation is definitely day to day, almost minute by minute, and we will get through it, but it’s not fun. I guess my biggest concerns are the unintended consequences," Wenstrand said.

Wenstrand said Modesto Steel has enough inventory for the short term, but a practically overnight increase of 25 percent on steel means pricing for products is difficult to gauge and quotes that used to last 30 days are a thing of the past.

"Now, as a result, we are down to one day, which basically mirrors our vendors. Many of our vendors will only hold a quote for us for one day," Wenstrand said.

Wenstrand believes the market will eventually level out and the volatility will slow, but for now he is focused on his 35 employees and ensuring the impact of the tariffs is minimized.

"They’re like family and I just try to make sure I can take care of them," Wenstrand said.

Unpredictability is the major issue for Modesto Steel and many others. Trump has said other countries could have the tariff lifted but for right now, as Wenstrand said, it is a day by day worry for steel businesses, many that serve the agricultural businesses in the Central Valley.