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'A pretty high price'

Upton talks tariffs, economy with SWMI manufacturers

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Benton Harbor, MI, May 14, 2019 | comments
'A pretty high price'
Upton talks tariffs, economy with SWMI manufacturers

The Herald-Palladium
May 14, 2019

BENTON HARBOR — On the day China announced it would further escalate the ongoing trade war with the United States, U.S. Rep. Fred Upton addressed his stance on tariffs with several Southwest Michigan manufacturers.

Upton, R-St. Joseph, met with a handful of companies Monday for a roundtable discussion in Benton Harbor, which included Gast Manufacturing, Hanson Mold, Vail Rubber, Vickers Engineering and Whirlpool Corp.

“The argument has been the longer these tariffs last, particularly on steel and aluminum, the more incentive there will be for us to move those jobs overseas,” Upton said. “We don’t want that to happen. At some point, we need certainty in the process, and for these temporary tariffs, we hope will be just that, temporary.”

The pact has been stuck in limbo over the continued skirmish over tariffs on aluminum and steel that is affecting Canada and Europe – in addition to the escalating trade war with China.

Upton said he’d like to see a cease fire when it comes to these tariffs.

While Canada and Mexico were reluctant to renegotiate the prior trade agreement, Upton said the only thing holding up the USMCA are the tariffs themselves.

“(The tariffs) got Canada and Mexico to the table,” Upton said after the discussion. “Our trade numbers have done pretty well over the last 20 years. …The USMCA is a better deal than NAFTA, but now you’ve got to lift the tariffs (in advance) to get it done.”

The roundtable was sent up a couple weeks ago to discuss the USMCA and its current status. However, with the breakdown in U.S.-Chinese negotiations, the conversation gravitated toward tariffs.

On Monday, Chinese officials said they intend to levy tariffs on more than 5,000 U.S. products in retaliation for President Donald Trump’s decision to further raise duties on Chinese goods amid trade talks between the world’s two largest economies.

Trade talks between the two countries stalled last week without a deal after Trump raised tariffs on $200 billion in Chinese goods.

“We need to hold those countries accountable,” Matt Tyler, president and CEO of Vickers Engineering, said during the roundtable. “… We just want a fair shake.”

According to USA Today, China’s new tariffs are expected to impact $60 billion in U.S. imports and would range from 5 percent to 25 percent. The tariffs will take effect June 1, which would give the two sides time to resume trade negotiations.

Michael Redman, vice president of sales at Hanson Mold, said the tariffs Trump imposed last year have created major problems for the company as they buy steel from Sweden, Austria and Germany.

Jeff Noel, vice president of communications and public affairs at Whirlpool, said the appliance maker is taking a wait-and-see approach when it comes to the recent trade war.

“We can’t run our business on the short-term,” Noel said. “We can’t try and speculate what’s going to happen over the next 60 or 90 days relative to trade. So, what we do is we need to sit tight, be patient and understand what are the ultimate outcomes.”

Whirlpool has had to deal with rising costs on raw materials due to the steel and aluminum tariffs. In Whirlpool’s latest earnings report, the company surpassed expectations after raising the price of its appliances.

Upton said tariffs come at a “pretty high price” because they put domestic jobs at risk.

“The market really is uncertain,” Upton said in reference to the Dow Jones Industrial Average dropping 600 points on Monday. “People are looking for leadership. They want a trade deal and I think everyone was disappointed.”

Contact: twittkowski@TheHP.com, 932-0358, Twitter: @TonyWittkowski

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