USA TODAY International Edition
Many Wisconsin manufacturers ‘crushed’ by tariffs
Firms must grapple with uncertainty, rising costs
MILWAUKEE – Rob Parmentier has weathered some rough times in the boat-building business, but the trade wars with China, Europe, Canada and Mexico have shaken him to the core.
“It’s been catastrophic,” said Parmentier, president and CEO of Marquis-Larson Boat Group, which builds Carver yachts in Pulaski, Wisconsin.
The first “hand grenade,” as Parmentier described it, was a 25 percent tariff the European Union placed this year on boats built in the U.S., along with scores of other products including Harley-Davidson motorcycles.
Then there was a 10 percent tariff slapped on boats shipped to Canada, along with price increases up to 40 percent on boat building materials.
It’s sent a shock wave through U.S. boat manufacturers.
“We’ve had a lot of order cancellations. Canada and Europe have essentially stopped buying boats,” Parmentier said.
About 450 people work at the company, a large employer in a town of 3,600 residents.
If boat orders continue to slide because of the trade wars, Parmentier said, it will trigger layoffs that could last a long time.
“We’ve been absorbing some of the additional costs … hoping the tariffs will go away. But we can only do that for so long,” he said.
Across America’s heartland, small and midsize manufacturers are reeling from higher costs and lost business attributed to a breakdown in foreign trade.
While some have benefited, others have been hammered by rising tariffs – a tax on imported or exported goods – on products including boats, electronics, sporting goods, bourbon and baby cribs, to name a few.
The “handshake deals” Trump made with Canada and Mexico may have saved thousands of automaker jobs. Yet smaller companies, Parmentier said, haven’t seen much relief.
“The rest of us little guys are just getting crushed,” he said.
The tariffs that China recently placed on American ginseng and bourbon, for example, have clobbered Great Northern Distilling in Plover, Wisconsin, which makes ginseng-infused bourbon.
It’s cost the company 25 percent of its sales.
“All of the buyers have cold feet now. They’ve said until this gets resolved, they’re not placing an order,” said Brian Cummins, co-founder of the distillery, which has 11 employees.
In Cumberland, a town of about 2,200 residents in rural northwest Wisconsin, Ardisam Inc. has warned U.S. trade officials of the harm that a 25 percent tariff on Chinese goods could have on its business and the community.
Ardisam is one of the town’s largest employers, and over 58 years, its product line has grown to include hunting and fishing gear, garden equipment and the Yardbird Chicken Plucker for home poultry enthusiasts.
If left in place, the tariff stands to “completely eliminate” the profit on some products, according to the company.
“Put simply, two things could happen … the consumer will end up paying the tariff, or Ardisam will discontinue selling these products and reduce its workforce accordingly to adjust to the reduction in business,” company President Michael Furseth said in a letter this summer to U.S. trade officials.
“Under either scenario, individual Americans will suffer. In a town the size of Cumberland, the result of a workforce reduction would have a disproportionately negative impact on the entire community,” Furseth said.
Ardisam says it can’t easily sidestep the tariffs by finding other suppliers for things like electric log splitters.
“There is currently no large-scale manufacturing of these products happening in the U.S., and the amount of time and resources necessary to establish this level of manufacturing would undoubtedly jeopardize the industry as a whole and particularly Ardisam’s business and jobs in Cumberland,” Furseth said.