1 00:00:00,160 --> 00:00:04,240 President Trump's promised tariffs on steel and aluminum imports have 2 00:00:04,240 --> 00:00:09,269 drawn mixed reaction from political leaders, including pushback from top congressional 3 00:00:09,269 --> 00:00:10,690 Republicans. 4 00:00:10,690 --> 00:00:12,880 American businesses are also divided. 5 00:00:12,880 --> 00:00:17,380 Hari Sreenivasan spoke to one business owner about how the tariffs might affect his company. 6 00:00:17,834 --> 00:00:20,834 Paul Czachor is CEO of the American Keg Company. 7 00:00:21,619 --> 00:00:25,789 It's the only domestic manufacturer of steel kegs in the country. 8 00:00:25,789 --> 00:00:26,820 Thanks for joining us. 9 00:00:26,820 --> 00:00:30,980 First, we hear the president is about to sign off on these tariffs as early as tomorrow 10 00:00:30,980 --> 00:00:31,980 perhaps. 11 00:00:31,980 --> 00:00:32,980 Are you a fan of it? 12 00:00:32,980 --> 00:00:35,690 Hari, thanks for having me on. 13 00:00:35,690 --> 00:00:38,360 I would say that we are very concerned with the tariffs. 14 00:00:38,360 --> 00:00:43,480 I think, when we first started discussing this, we were cautiously optimistic. 15 00:00:43,480 --> 00:00:45,789 And now that's turned to a concern. 16 00:00:45,789 --> 00:00:47,719 HARI SREENIVASAN: How come? 17 00:00:47,719 --> 00:00:55,280 PAUL CZACHOR: Well, today, our domestic-made kegs are priced higher than several imports, 18 00:00:55,280 --> 00:00:56,940 mainly from China. 19 00:00:56,940 --> 00:01:02,050 And if these tariffs go through, domestic steel will continue to increase in price, 20 00:01:02,050 --> 00:01:07,010 but all of the import kegs will still use the low-cost steel from offshore, and those 21 00:01:07,010 --> 00:01:09,410 prices will stay the same. 22 00:01:09,410 --> 00:01:13,190 Therefore, the delta will be even higher to purchase an American-made keg. 23 00:01:13,190 --> 00:01:16,380 So, how do you live through that? 24 00:01:16,380 --> 00:01:18,910 Do you end up absorbing the cost to try to ride this out? 25 00:01:18,910 --> 00:01:21,230 PAUL CZACHOR: I don't think we could live through that. 26 00:01:21,230 --> 00:01:23,530 I mean, the cost will be significant. 27 00:01:23,530 --> 00:01:29,650 If steel goes up by $25 -- or 25 percent, that's going to be a significant increase 28 00:01:29,650 --> 00:01:32,460 to a stainless steel keg that's made domestically. 29 00:01:32,460 --> 00:01:38,060 HARI SREENIVASAN: You know, the administration's core reasoning for is that it's been unfair 30 00:01:38,060 --> 00:01:40,740 for a long time, and we're just trying to fix it. 31 00:01:40,740 --> 00:01:44,060 Have you felt that kind of pressure when you have been running this business? 32 00:01:44,060 --> 00:01:49,680 PAUL CZACHOR: I think what the administration is trying to do is fix a problem in the steel 33 00:01:49,680 --> 00:01:54,560 and aluminum industry, and not to deep enough -- I don't have a deep enough understanding 34 00:01:54,560 --> 00:01:59,560 to tell you how I feel about that, but I'm sure they're trying to fix a problem. 35 00:01:59,560 --> 00:02:05,680 But the concern we have is for the downstream products, such as stainless steel beer kegs. 36 00:02:05,680 --> 00:02:07,530 That's not going to help any downstream products. 37 00:02:07,530 --> 00:02:11,520 As I said earlier, those import kegs will still come in using the low-cost steel. 38 00:02:11,520 --> 00:02:15,481 HARI SREENIVASAN: So what I'm hearing is, is if this is bad for your business, what 39 00:02:15,481 --> 00:02:16,720 happens to your employees? 40 00:02:16,720 --> 00:02:21,210 PAUL CZACHOR: Well, unfortunately, if it's -- if it's the worst-case scenario that we're 41 00:02:21,210 --> 00:02:26,240 looking at, we would be forced to shut down, just because we couldn't compete using high-priced 42 00:02:26,240 --> 00:02:27,240 domestic steel. 43 00:02:27,240 --> 00:02:33,390 You know, the hope from the administration is, you know, it's got to be a multistep process, 44 00:02:33,390 --> 00:02:38,450 and, somehow, we have to address the downstream products that are coming into this country 45 00:02:38,450 --> 00:02:39,490 with low-cost steel. 46 00:02:39,490 --> 00:02:43,090 I don't know how we can get that done, and I don't know if it can happen quickly enough. 47 00:02:43,090 --> 00:02:45,341 HARI SREENIVASAN: So, how -- I was going to say, how do you do that? 48 00:02:45,341 --> 00:02:49,010 I mean, that would mean all the different products that are made with low-cost steel 49 00:02:49,010 --> 00:02:52,120 that come in that we are consuming right now. 50 00:02:52,120 --> 00:02:57,490 PAUL CZACHOR: We certainly will try to, you know, petition for some tariffs on stainless 51 00:02:57,490 --> 00:02:58,490 steel kegs. 52 00:02:58,490 --> 00:03:04,210 But, again, there are several industries that use steel for their domestic-made products. 53 00:03:04,210 --> 00:03:07,960 And I don't know how the administration will address the multiple industries that will 54 00:03:07,960 --> 00:03:09,340 be impacted with this. 55 00:03:09,340 --> 00:03:12,420 HARI SREENIVASAN: How many employees do you have now? 56 00:03:12,420 --> 00:03:15,870 PAUL CZACHOR: I have approximately 20 employees. 57 00:03:15,870 --> 00:03:21,260 And, unfortunately, we had to let approximately 10 employees, so we're at -- let them go. 58 00:03:21,260 --> 00:03:23,540 We were at 30 employees a couple of weeks ago. 59 00:03:23,540 --> 00:03:28,430 But we're already starting to see the steel prices domestically go up, and we're starting 60 00:03:28,430 --> 00:03:29,630 to lose some business already. 61 00:03:29,630 --> 00:03:32,950 HARI SREENIVASAN: So, you know, for somebody who doesn't understand this business, kind 62 00:03:32,950 --> 00:03:34,220 of break that down for us. 63 00:03:34,220 --> 00:03:39,460 How does the cost of steel going up into your kegs impact your business so profoundly that 64 00:03:39,460 --> 00:03:40,840 you have to start making cuts? 65 00:03:40,840 --> 00:03:46,940 PAUL CZACHOR: Well, when we go out, our customers -- we have approximately -- in the U.S., there's 66 00:03:46,940 --> 00:03:52,510 approximately 7,000 craft brewers, wineries, and cideries that will purchase those kegs. 67 00:03:52,510 --> 00:03:56,970 And when we talk with our customers, they're certainly willing to pay a small price -- or 68 00:03:56,970 --> 00:04:03,600 a higher price for an American-made keg with American steel, American workers, et cetera. 69 00:04:03,600 --> 00:04:07,970 But that price, the delta, is continuing to go higher and higher. 70 00:04:07,970 --> 00:04:13,190 So, maybe at $5 a keg, a customer is willing to do that to support American-made products. 71 00:04:13,190 --> 00:04:16,820 But at $15 or $20, they're not willing to do that. 72 00:04:16,820 --> 00:04:21,450 HARI SREENIVASAN: Paul, what I'm hearing is that these workers that you have are exactly 73 00:04:21,450 --> 00:04:27,210 who the administration wants to save and want to see their lives improve, but you're describing 74 00:04:27,210 --> 00:04:29,190 a scenario where this is actually making it worse. 75 00:04:29,190 --> 00:04:30,190 PAUL CZACHOR: Yes. 76 00:04:30,190 --> 00:04:34,980 And, you know, I believe the administration wants to fix several items, but they're going 77 00:04:34,980 --> 00:04:38,700 to have to certainly look at the downstream products, as I mentioned earlier. 78 00:04:38,700 --> 00:04:43,419 And I'm sure there's many industries similar to us that use domestic steel where it's going 79 00:04:43,419 --> 00:04:47,840 to increase, and not by a trivial amount, but by a significant amount in the case of 80 00:04:47,840 --> 00:04:49,120 stainless steel kegs. 81 00:04:49,120 --> 00:04:51,470 HARI SREENIVASAN: How do you resolve this? 82 00:04:51,470 --> 00:04:52,490 What do you hope happens? 83 00:04:52,490 --> 00:04:56,680 PAUL CZACHOR: Well, I would hope that we'd reconsider some of these tariffs, at least 84 00:04:56,680 --> 00:05:01,699 delay them, or look at the holistic view of, how do we fix some of the downstream issues? 85 00:05:01,699 --> 00:05:05,140 HARI SREENIVASAN: All right, Paul Czachor, CEO of the American Keg Company, thanks so 86 00:05:05,140 --> 00:05:06,140 much. 87 00:05:06,140 --> 00:05:07,571 PAUL CZACHOR: I appreciate it. 88 00:05:07,571 --> 00:05:07,821 Thank you.