State businesses caught in tariff-war ‘crossfire’
GREEN BAY - The first wave of tariffs stung Wisconsin farmers and manufacturers, but Tony Ehrbar said the next wave will force him to change the way he does business.
Ehrbar owns American Tent & Sidewall, a small Green Bay manufacturer that turns Canadian aluminum and Chinese polyvinyl chloride, or PVC, into large party tents for weddings and commercial events. The Trump administration has targeted both raw materials for tariffs — 10 percent on aluminum and 25 percent on PVC.
Ehrbar was able to buy extra aluminum before the tariff took effect, but the growing manufacturer doesn’t have a lot of free cash to do the same again.
American Tent & Sidewall is one of dozens of Brown County businesses trying to figure out the impact tariffs will have on their businesses now and in the future. For Ehrbar, who has quadrupled sales since he bought American Tent in 2014, the PVC tariff means a loss of business no matter what he chooses.
“There’s an American-made vinyl, but it would not allow me to compete on price. I can raise my prices 25 percent (and pass along the cost to consumers). I can absorb the tariff and take a huge hit to my bottom line. Or I can raise prices a small amount and absorb the rest of the tariff,” Ehrbar said. “I may have to pull back on hiring staff or not grow as fast. The money’s just up in smoke.”
Tariffs’ impact on Wisconsin farmers and manufacturers has been
well-documented since the first wave took effect this spring. Business owners have shared their stories of losing sales and contracts with the state’s congressional delegation, who passed those concerns and some of their own along to Trump administration officials.
The tariffs have raised bipartisan concerns about their unintended consequences and some congressional action, but few options will help Ehrbar and other businesses in the short term.
“This is a knockout punch where you swing around and hit yourself in the face,” Ehrbar said. “The hardest part for me is I understand tariffs in some cases, if they’re well thought-out. But raw materials fuel American manufacturing.”
Robinson Metal Inc. operations manager Sam Thomas said the company has passed along raw materials price increases to customers since the tariffs went into effect.
He said the De Pere-based company buys aluminum and steel in such large quantities it was able to buy before the tariffs took effect and negotiated a better price than a smaller manufacturer could.
“With our size and relationships we have built with strategic partners, we’ve been able to get in front of it on a demand standpoint. We may be able to get a little better price,” Thomas said. “From a buying standpoint, smaller shops don’t have that leverage.”
Ehrbar is one such small shop, and he said the tariffs, the PVC one especially, could derail four years of hard work and investment.
“You always plan for contingencies, but small business owners aren’t swimming in cash,” Ehrbar said. “They’re investing in their business, employees and community to make it better. This throws some water on our fire for growth.”
Wisconsin delegation working on it
Wisconsin’s congressional delegation continues to collect and pass along stories from business owners while they pursue more oversight for Congress.
Sen. Ron Johnson, R-Oshkosh, Sen. Tammy Baldwin, D-Madison, and Rep. Mike Gallagher, R-Green Bay, have found common ground on quite a few elements of the tariffs.
❚ They all want business owners to keep sending their stories.
❚ They all support giving Congress oversight of tariffs imposed in the name of national security.
❚ They all support efforts to punish China for unfair trade practices.
Johnson said his office is hearing from more companies affected by tariffs, which he shares with Trump administration trade officials regularly.
Johnson said he supports Trump’s efforts to “shock the system” of global trade but is hopeful renegotiated trade agreements with Mexico and Canada will ease some tariffs with two nations that buy from and sell to a lot of Wisconsin businesses.
“We’re certainly hearing they realize there’s pressure and the clock is ticking, that they’ve got to complete these trade deals,” Johnson said. “They’re telling us they’re very close with Mexico, and they believe if Mexico agrees that Canada will follow. They’re trying to achieve a long-term goal while recognizing the short-term pain.”
Baldwin said the businesses she hears from have “been drafted into a trade war not of their choosing” and that a more strategic, directed use of tariffs is needed.
“If he (Trump) insists on tariffs — and I am not just outright opposed to tariffs — they have to be smart, not haphazard,” Baldwin said. Trump has “done a ham-fisted, ham-handed job of imposing these tariffs. He should go after China because China cheats. They subsidize their industries that compete with ours. He should not be imposing tariffs on Canada, on Mexico, on the European Union that have been our allies.”
Gallagher, like Johnson, co-introduced legislation to give Congress 60 days to debate and vote on any tariffs imposed in the name of national security, called Section 232 tariffs. Gallagher said congressional oversight would lead to a “a more responsible process going forward.”
But he said the current approach to tariffs and trade policy is casting a long shadow over positive economic growth the United States has experienced in recent years.
“I fully support (the administration) trying to get tough on China,” Gallagher said. “At the same time, to simultaneously pick a fight with the free world will make it harder to be successful against China. I think (the use of) Section 232 tariffs is so worrisome because it’s going to be our farmers and manufacturers getting caught in the crossfire, particularly at a time when we have a good economic story to tell.”
Baldwin is concerned the biggest impact of Trump’s trade policies is still to come, though.
“The other group being impacted is consumers, which is all of us,” she said. “We’re going to see prices go up because of this trade war and tariffs and a lot of hardworking families can ill afford to see all kinds of prices raised for them.”