Tariff knowns, unknowns impacting county
While the overall economic impact of President Donald Trump’s tariffs on Chinese goods remains uncertain, Rappahannock County consumers and companies alike can expect with the rest of America to feel a pinch.
“Forget the tariffs,” said county cattle farmer Jim Manwaring of Red Oak Ranch. “Just the fact that a trade war might happen affected [prices].”
Last week, Trump escalated a trade dispute he started earlier in the year by launching an effort to put tariffs on $200 billion worth of Chinese goods, aimed at starting in September. That comes in addition to tariffs imposed on steel and aluminum from trading partners such as Canada and the European Union.
On July 6, China responded to tariffs placed on $34 billion in Chinese imports with retaliatory tariffs on an equivalent amount of U.S. goods, mainly aimed at products such as Kentucky bourbon and agricultural imports designed to create a political backlash in states that voted for Trump, say economists.
The list of goods with the
potential to be hit by tariffs is wide and could grow wider. Farming machinery, for instance, which consists of tariff-smacked steel and aluminum, is in the crosshairs of retaliatory trade wars, which translates into rising prices for consumers.
Already the increased steel and aluminum prices are spelling higher costs for everything from highway construction to lighting fixtures. If you can find them, that is.
“We’re already getting hit with some things,” said Rappahannock County resident Ted Goshorn, owner of the local heating and air conditioning firm Goshorn, Inc., not the least being reduced inventory and contractors gobbling up the remaining affordable merchandise.
“Anything with aluminum, sheet metal, copper can have a [delayed] delivery time of 14 to 16 weeks,” explained Goshorn, whose company was founded in 1987. “I’m telling customers to get orders in now or else we can be looking at price increases of $3,000. Electrical contractors right now are waiting 8 to 10 weeks for lighting fixtures for their commercial jobs. It’s a crazy market we’re in right now — we’re not used to waiting this long.”
While beef prices have been falling for years, for some local cattle farmers it's hard not to attribute recent declines to market uncertainties tied to tariffs. People are looking out a year and wondering how what they buy today will sell for in a year, Manwaring explained.
"People that will buy my calves a year from now are saying, ‘What if? What if?' and that affects the price."
The average per-pound price for live cattle has dropped by roughly 30 cents since February, from $1.80 to around $1.50, already a big dip from market highs just a few years ago.
Like Goshorn, Arthur Fichter, of the employeeowned Solar Services, Inc., in Front Royal, relies heavily on steel, aluminum and other materials.
Energy-Sage Solar Marketplace has warned in recent weeks that Trump’s 30 percent tariff on solar imports, which includes all-important solar cells and modules (panels), will increase average home solar installation by $500 to $1,000.
But Fichter said while he can foresee a slight increase in installation costs, “the real impact is availability.”
“I was just looking at the tariff list yesterday,” he said, pointing out that much of the potential impact on the blossoming solar industry surrounded aluminum and steel.
But Fichter stressed that solar, which is aided by generous federal and state incentives for consumers, is healthy. “Fast and furious,” he said. “We are very busy.” With 250,000-plus workers, the U.S. solar industry employs three times more people than the coal industry, according to the U.S. Energy Information Administration.
Others remain wary.
Trade Partnership Worldwide, a trade and economic firm of international economists, predicts that 16 U.S. jobs will be lost for every metal-making job (aluminum, steel, etc.) that could be created in this country as a result of the newly imposed tariffs — 400,000-plus lost jobs total.
Even newspapers like the one you’re reading aren’t spared by the threat of additional tariffs. Just this week, 19 bipartisan members of Congress rallied against the Commerce Department imposing substantial tariffs on newsprint from Canada after a single Washington-based paper mill cried foul about being victimized by Canadian paper producers.
The preliminary tariffs, the lawmakers argued in testimony before the U.S. International Trade Commission (ITC), would increase costs for newspapers that are already struggling in the internet age and cause others to either cease publication or cut staff. The ITC will vote up or down on the newsprint tariffs in August.
“The tariffs are significantly increasing our production expenses. Newsprint is a commodity, and our printers are passing along their increased costs to us,” said Dennis Brack, president of Rappahannock Media, which publishes the Rappahannock News and four other weekly newspapers.
“In most small communities, the local newspaper is the primary source of local news. There’s a danger that these higher costs will damage important civic institutions.”