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New tariffs impact Tri-State businesses, big and small

Posted: 5:00 AM, Jun 18, 2018
Updated: 2018-06-18 15:56:13Z

BLUE ASH, Ohio -- Since 1952, Blue Ash manufacturer Sheffer Corporation has produced hydraulic cylinders for its clients across the country, including NASA. With facilities in Atlanta and Canada, it was Sheffer’s Buckeye-striped headquarters that President Donald Trump chose to visit on his Feb. 5 trip to the Tri-State.

Sheffer President and CEO Jeff Norris said business has climbed 10 percent since then, and employees were “thrilled” to receive $1,000 bonuses following savings from the new corporate tax bill. A whiteboard on the factory floor still reads “SHEFFER THANKS PRESIDENT TRUMP” in faded blue marker.

But, four months later, Trump impacts Sheffer in a less welcome way: The company’s material costs for steel and overseas parts are rising because of new tariffs.

“It’s a fairly major and significant amount,” Norris said. “Almost all of it’s steel material. We have steel material, and some of those will be caught up by the tariffs, too.”

In March, Trump proposed 25 percent tariffs on steel and 10 percent tariffs on aluminum imports from China. Last week, he extended those tariffs to include American allies Canada, Mexico and the European Union for national security concerns.

Those countries are already firing back with tariffs of their own, matching metal duties and imposing new tariffs on American specialties like Kentucky bourbon and Harley-Davidson motorcycles, as well as food products like pork, cheese and soybeans.

In April, the U.S. also released a list of 1,300 products and materials targeted for tariffs, including cars, aircraft and chemicals. GE, whose global operations center sits on The Banks, is concerned by those tariffs. Nearly 85 percent of the tariffs will impact American manufacturers in some way, the company’s President of Government Affairs and Policy Karan Bhatia told lawmakers. 

In testimony to the United States Trade Representative’s Office [ge.com], Bhatia said American tariffs would force the company to find expensive alternative sources of materials, giving foreign competitors a leg-up.

“Even with heavy tariff pressures, these inputs cannot be readily moved to a new supplier outside of China,” Bhatia told the agency in May.

Bhatia said tariffs on parts from China made of American materials, like aviation parts that are roughly 50 percent U.S. content, hurts the companies that make those parts, “as well as those GE plants and workers who turn the imported parts into final products in the United States.”

GE, who also has an aviation division in Evendale, exports 60 percent of its products around the world.

Small Ohio companies also testified against tariffs. Mansfield pump manufacturer Warren Rupp, Inc. and American Power Pull, a family-owned company in Wauseon, told the U.S. Trade Representative’s Office that rolling out tariffs on imports stifles small companies.

American Power Pull president Edward Kraemer told the agency the impact of tariffs on 40 percent of his products would fall squarely on his company, not China.

“We recognize the long term goal is to force China into treating USA companies properly,” Kraemer said. “However, we do not believe it was your intent to penalize USA companies in the process.”

Sheffer’s clients mainly deal in metal machines, and Norris predicts those clients will have to pass rising costs along to their consumers or to take a hit themselves because of tariffs.

At the same time, with tariffs deterring customers’ willingness to shop overseas, Norris hopes Sheffer will continue to grow.

“I understand where President Trump is coming from by doing it, and my hope is that our supply chain in the U.S. picks up now that these tariffs are potentially in place and so forth,” Norris said.

“I would have liked to have seen more of this about 25 years ago when we had a lot more capacity, but unfortunately it has to be done at sometime, and today it’s being done.”

And of course, Norris adds, the president is welcome back for a visit anytime.