Area firms in rush to get ahead of tariffs
3 warn penalties on China goods to hurt
At least three Central Florida companies are warning that 25 percent tariffs on Chinese equipment and parts set to kick in today will make it harder for them to do business.
Tompkins Robotics in Orlando, an e-commerce supply chain automation company, estimates it would take 18 months to set up factories in the U.S. to produce the robots they need. Production in the U.S. also would hinge on getting legal permission from the Chinese manufacturer that jointly holds the patent and produces the robots there.
The mechanical robot arm, the infrastructure and components are made by U.S. manufacturers, and Tompkins developed software that ties it all together. The self-driving bots are the only imports Tompkins buys directly from China.
“It is a lower price point,” said Jim Serstad, director of product development, but there’s more to it, he explained. The bots, about 20 pounds each, are small, and the system can be easily expanded, he said.
The tariff on the robots hinders the company’s growth, Serstad said. The company had planned to expand its space and double the workforce in Orlando from 30 to 60 by next year with engineering jobs — software, mechanical,
electrical, industrial — as well as an installation crew and managers.
In the lab, self-driving bots about the size of turntables move up and down long platforms, pausing to avoid collisions when they are in the path of other bots. They carry items selected by a robotic arm to one of the many boxes along the edge. The bots tilt, depositing the goods into receptacles below.
With the tariffs about to take effect, the latest shipment of 450 robots had to be flown in.
“We paid a lot of money to air freight,” said Serstad, noting it was still cheaper, compared with paying tariffs.
The company is filing for an exemption, he said, because the financial burden of the tariffs is not something it could absorb without passing it along to clients, which include Nordstrom department store and several of the top 50 retailers in the U.S.
Exemptions are not easy to come by. Tariffs on steel imported from China are already in effect, and a Lakeland manufacturer of stainless steel tubing was denied an exemption on a custom order that his company could not produce in Florida.
Todd Adams, vice president of Stainless Imports, said he traveled to a steel mill in China to fulfill a $2 million order for a dairy in Ohio.
At the time, he was thinking, “Well, this is a lot of money to risk, but I know we have a strong case,” Adams said.
Ten freight containers arrived. Two made it before the steel tariffs went into effect, but the remaining eight did not. The tariffs amounted to hundreds of thousands of dollars.
In response, the company made two exemption requests for the custom sizes of steel tubing sourced in China. One was denied. The second request will probably be denied too, he said. He is still trying to figure out on what grounds it was denied.
“Nobody is bothering to even tell us why,” Adams said.
An aftermarket auto parts company in Orlando, family-owned Gilmore Products, which has clients who are wholesalers and retailers, stated in a public comment to the Commerce Department that passing on the 25 percent tariffs to car owners for air conditioning compressors from China would hurt U.S. distributors and mechanics. The current price of $1,500 to restore an air conditioning system for a used car has no low-cost alternative, the company said.
“An additional tariff on these parts will not reverse the course of the existence of these factories in China since this volume of new compressors was never manufactured in the U.S.,” wrote Nicole Gilmore Breyer.
In the meantime, Tompkins Robotics is keeping its fingers crossed. At the request of its parent company, U.S. Rep. David Price, D-N.C., wrote a letter of support for an exemption.
Serstad flew to Washington, D.C., to meet with U.S. Rep. Darren Soto, D-Kissimmee, for help with the exemption, too, but no letter came as a result. “I realize that a congressman can’t get involved in every issue,” he said, adding there were no promises.