Page 25 - ARUBA TODAY

BUSINESS Thursday 12 July 2018
A25

Trade pain: Small companies hit by import, export tariffs

By JOYCE M. ROSENBERG based company, The Hero
Associated Press Lab, is absorbing part of
NEW YORK (AP) — Time and the increases. Some racing
effort have gone down the customers are still delaying
drain for Steve Gould, who orders.
is scrambling to find new "What they budgeted to
customers for his gin, whis- cost $1,000 now is now
key and other spirits since $1,200 or $1,500," Barton
the United States has taken says. "They're pushing their
a tough stance on trade is- orders back four to six
sues. weeks, waiting for a few
Before the European Union more paychecks to come
retaliated against new U.S. in."
tariffs with taxes of its own, Jeff Schwager's cheese
Gould expected revenue company, Sartori, is sell-
from the EU at his Golden ing products to Mexico
Moon Distillery in Colo- at break-even prices be-
rado to reach $250,000 or cause of that nation's re-
$350,000 this year. Now taliatory 25 percent tar-
he's concerned that Euro- iff. Twelve percent of the
pean exports will total just Plymouth, Wisconsin-based
$25,000. Golden Moon al- company's revenue comes
ready saw an effect when In this June 21, 2018, file photo, a bale of cotton sits packed and labeled waiting to be shipped from exports, which is the
from the South Central Georgia Gin Company in Enigma, Ga.
then-candidate Donald Associated Press fastest-growing segment of
Trump made trade an is- the business.
sue during the 2016 cam- day threatened to impose bust pace. But those hurt slow. "It's probably going to Sartori and its Mexican im-
paign. Gould lost one of his 10 percent tariffs on thou- by tariffs are can lose their be more about a reduction porter are each absorb-
Mexican importers and an sands of Chinese products optimism and appetite for in hiring than it is about lay- ing half the costs of the
investor, as overseas de- including fish, apples and growth within a few months. offs," Truslow says. tariff. Schwager, the CEO,
mand for small-distiller spir- burglar alarms. And China "They have narrow profit The ripples are being felt doesn't see leaving the
its was growing. responded with a tariff margins and it's a tax," says across the industry, says Mexican market as an op-
"We've lost years of work threat of its own, although it Kent Jones, an economics Tom Dammrich, president tion. "If you lose space on
and hundreds of thou- didn't say what U.S. exports professor at Babson Col- of the National Marine the grocery store shelf, or
sands of dollars in building would be targeted. lege. "That lowers their prof- Manufacturers Association you're taken out of recipes
relationships with offshore Small businesses are par- it margins and increases trade group. He estimates in restaurants, that takes
markets," says Gould, who's ticularly vulnerable to tar- the possibility of layoffs and there are about 1,000 man- years to get back," he says.
hoping to find new custom- iffs because they lack the even bankruptcies." ufacturers, almost all small He hopes the trade dispute
ers in countries like Japan. financial resources larger Bertram Yachts is one com- or mid-size businesses, and can be resolved and tariffs
President Donald Trump's companies have to absorb pany finding it trickier to says some parts can only rolled back.
aggressive trade policies higher costs. Large compa- maneuver. The U.S. has be bought from China. But some small manufactur-
are taking a toll on small nies can move production put a 25 percent tariff on Matt Barton's metal fab- ers believe they can ben-
U.S. manufacturers. The overseas — as Harley-Da- hundreds of boat parts im- rication company, which efit from a trade dispute.
president has imposed vidson recently announced ported from China, where makes custom replace- Greg Owens, president
tariffs of 25 percent on it would do to escape 25 most marine components ment parts for farm equip- of flatware maker Sherrill
steel and 10 percent on percent retaliatory tariffs are made. And European ment, outdoor signs and Manufacturing, says if his
aluminum imports from in Europe. But "if you're a countries have imposed people who race hot rods, competitors in China are hit
most of the world, includ- small firm, it's much harder a 25 percent tariff on U.S.- is paying its suppliers up to by U.S. tariffs, he could see
ing Europe, Mexico and to do that; you don't have made boats. Last year, 20 percent more for metals revenue increase.
Canada, driving up costs an international network of Bertram exported about a than it did a year ago. "They would have to raise
for companies that rely on production locations," says third of its boats, with half Prices had actually soared the retail price, which
those metals. And he has Lee Branstetter, professor going to Europe. as much as 40 percent would allow us to raise our
slapped 25 percent taxes of economics and public "We have been squeezed months ago amid expec- prices," says Owens, whose
on $34 billion in Chinese policy at Carnegie Mellon on both sides," says Peter tations of U.S. tariffs on company is located in Sher-
imports in a separate trade University's Heinz College. Truslow, CEO of the Tampa, aluminum and steel. They rill, New York. In turn, Owens
dispute, targeting mostly Shifting manufacturing Florida-based boat maker. have since steadied, but says, that would allow "long
machinery and industrial away from items that use Truslow doesn't know how are expected to remain overdue" raises for workers
components so far. Trump's components that are be- the tariffs will affect the high for three to six months. and upgrades to capital
tariffs have drawn retalia- ing taxed is also harder company's sales and prof- Barton's Pittsboro, Indiana- equipment. q
tion from around the world. since small businesses tend its, but dealers he's spoken
China is taxing American to make fewer products, to in Europe have already
soybeans, among other he says. And if tariffs make gotten cancellations on
things; the European Union it too expensive to export boats that run into the mil-
has hit Harley-Davidson to their current markets, lions of dollars. Bertram
motorcycles and Kentucky small companies may not plans to try to build up its
bourbon; Canada has im- be able to afford the effort strong U.S. business and
posed tariffs on a range of of finding new ones. seek more customers in
products — from U.S. steel Small business owners have countries that aren't in-
to dishwasher detergent. been growing more con- volved in trade disputes
More businesses could fident over the past year with the U.S. including Ja-
be feeling the pain as the as the economy has been pan and Australia.
trade disputes escalate — strong, and they've been Still, the company's growth
the administration on Tues- hiring at a steady if not ro- and job creation stand to