Trade war continues to roil manufacturers

Brian Pedersen//July 15, 2019

Trade war continues to roil manufacturers

Brian Pedersen//July 15, 2019

Last year, as the U.S. imposed tariffs on a growing number of products and materials, manufacturers found themselves struggling with the uncertainties of how an emerging trade conflict could affect their business.

Now, about a year and a half later, uncertainty lingers for some, yet the feeling is mixed with a desire to level the playing field in what many people in the industry view as an unequal playing field.

While many oppose tariffs, others say that to ensure have fair trade, nations have to play fair, and nations such as China have not been, they argue.

Chris Dybach works in the production area at ATAS International in Upper Macungie Township. The manufacturer of metal roofing, panels and other products has seen steel prices fluctuate over the last 18 months. (Submitted) –

They hope that tariffs can result in better trade arrangements.

“For too long, manufacturers have paid the price while China has reaped the rewards of its unfair trade practices, intellectual property theft and exploitation of existing trade agreements,” Jay Timmons, president and CEO of the National Association of Manufacturers, said in a statement.

Still, he added, “The effects of tariffs and retaliatory tariffs are further weighing on our confidence and our ability to hire and grow. With a more level playing field, we will be better equipped to reach our full potential.”

Though tariffs have created uncertainty for manufacturers, in Pennsylvania, the industry grew faster than the national average in the last quarter, said David Taylor, president of Pennsylvania Manufacturers Association, a manufacturing trade group based in Harrisburg.

Tariffs have been, in fact, a moving target and changing often, with some tariffs appearing to be on hold as the U.S. and China resume negotiations.

In a statement, Darlene Robbins, president of the Northeast Pennsylvania Manufacturers and Employers Association in Pottsville, said tariffs on $250 billion of Chinese imports, steel and aluminum have weighed on businesses for the past year.

The Schuylkill County-based organization serves more than 345 member companies in 20 counties.

The duties and the uncertainty have slowed investment in new factories as executives grapple with how the situation affects their supply chains and profit margins.

“The tariffs did increase the cost of domestic aluminum and steel that some of our companies source from Canada for products,” Robbins said. “Companies lost margins on existing projects and could only pass through some of the costs on future projects. It did force companies to be more active at limiting internal wastes, vendor accountability and overall efficiencies.”

When tariffs were first introduced in 2018, it inflated the metal costs for ATAS International, a manufacturer that produces metal roofing, panels and other products in Upper Macungie Township, said Dick Bus, the company’s president.

But prices have retreated since then, he added.

As an example, when steel tariffs of 25 percent were introduced a year and a half ago, Bus said his steel prices went up 20 percent. Now, it’s back down to the level it was before the tariffs were in place.

“I think the reason it’s come back down is the demand has slowed down,” Bus said.

Another reason is that China was taking America’s recycled materials, but now it is not, he added.

“Because the demand is low for our scrap material and China will not import scrap material from the United States that drives down the price of steel that I buy and the price of aluminum,” Bus said.

Bus said he is not concerned about the tariffs.

“I don’t think people should panic,” Bus said.

If a manufacturer does not like the price of steel one day, it will likely change tomorrow, downward and upward, he said.