OPINION: Repeal the tariffs

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The latest federal statistics show an annual inflation rate of 6% as of February, a slight decrease from January, when the annual rate was recorded at 6.4%. While this slight reduction may seem like welcome news, the bigger picture paints a far more alarming story: in 2020 the rate was just 1.4%. Prior to 2021, the highest recorded annual rate in the last decade was 2.3%, recorded in 2019.

Inflation remains a top concern for businesses and workers across our state. I am the president of OCA in Mercerville, a third-party administrator of health benefits that works with New Jersey employers, employees, and their families to provide cost effective and sustainable employee benefit programs.

We serve more than 2,000 clients ranging from Fortune 500 organizations to small businesses across a diverse range of industries, helping to power health care savings for more than 250,000 consumers. Our goal is to eliminate waste for New Jersey companies, so that both their owners and employees have more income.

Cost containment is an integral part of our business and we have witnessed firsthand the toll that inflation has taken on New Jersey’s businesses and families. Over the past year, the Consumer Price Index for Newark and Jersey City showed prices increasing by 6% across the board, with energy prices rising 8% and food prices rising by 7.8%.

To make matters worse, health insurance premiums are continuing to rise. According to the Center for American Progress, employer-sponsored insurance premiums have risen even above the surging rate of inflation, and have outpaced wage growth. This growing burden greatly affects low-wage employees, with many saying that rising costs prevent them from seeking medical care, or forcing them into debt.

My industry works to improve the quality of life for our clients by recognizing and addressing waste with cost-effective solutions. One action that we have identified that would result in direct economic relief for New Jersey businesses and workers struggling with increased costs is for Congress to finally repeal the Section 232 tariffs on steel and aluminum imports.

These tariffs are not just unnecessary; they are actively adding an extra burden for New Jersey families. A plethora of New Jersey businesses ranging from craft breweries to construction and manufacturing plants rely on imported aluminum, as the U.S. does not produce anywhere close to the amount of building materials needed to support domestic enterprise.

Just see what these tariffs have done to the cost of aluminum, which peaked at $3,800 a ton last year; the highest prices seen in a decade.

The downstream hits all of us.

Numbers from the Aluminum Association show that the aluminum industry supports over 6,000 New Jersey jobs; the manufacturing and wholesale operations of aluminum in the state generate more than $550 million in economic output. Additionally, the aluminum-dependent manufacturing sector is a major contributor to New Jersey’s economy, having added nearly $60 billion to New Jersey’s GDP in 2022.

To counteract the increasing costs, companies in the Garden State must reduce overhead or raise prices for consumers, a further – and completely unnecessary – burden on our local economy.

Inflation numbers may take years to return to their 2019 low. But right now, Congress has the opportunity to take immediate action and help lower costs for New Jersey businesses, employees, and consumers. It’s a no brainer: repealing Section 232 tariffs on steel and aluminum is a simple, surefire way to fight inflation.

Ross Honig is the president of OCA in Mercerville, and oversees all aspects of the company’s business operations, product development, and business growth.