South Carolina town fears what tariffs will cost
Winnsboro worries more jobs will vanish
WINNSBORO, S.C. – The potential closure of Element Electronics in Winnsboro, population 3,300, hits doughnut shop owner Crystal Paulk personally. She knows by name just about everyone who walks into her business.
“When something like that happens, we’re like a family,” Paulk said. “We’re all affected. I have to think about these families. That could be me.”
The Element plant could be the first in South Carolina to close because of tariffs on Chinese imports recently imposed by President Donald Trump. The closure would cost the community 126 jobs.
TVs at the plant are made out of components that are imported from China, and the tariffs make assembling the TVs here a losing proposition, the company has said. The company is fighting for a waiver but is bracing for shutdown.
Winnsboro is the seat of Fairfield County, where a third of the population lives in poverty. Unemployment among its nearly 23,000 residents is second-highest in the state, and, despite periodic rebounds, the population has fallen steadily over the past century.
“This is going to be a ghost town,” Winnsboro resident Herbert Workman said.
Even though Trump easily car- ried South Carolina and enjoys strong support from Gov. Henry McMaster, Fairfield County is not Trump country – 62 percent of voters cast ballots for Hillary Clinton in
2016. Still, some people in the town place faith in the president, even suggesting the tax on flat screens might have been an oversight.
“Why would you put a tax on an American company?” said Ty Davenport, the county’s director of economic development. “We think it was a mistake.”
Terry Vickers, director of the county Chamber of Commerce, said everyone she talks to has high hopes the administration will help Element.
“We are definitely a glass-halffull kind of town,” said Vickers, who has been running the chamber for
22 years. “Who would have thought when these tariffs were proposed that they would affect us right here?”
The area’s majority African-American population is a vestige of the pre-Civil War era, when Fairfield County’s labor force was primarily made up of slaves.
The evidence of bygone prosperity is visible around Winnsboro’s main corridor, Congress Street. PreCivil War town homes line streets running parallel to Congress, and a nearly 200-year-old courthouse designed by pre-eminent antebellum architect Robert Mills stands at the center of town. Most of the old structures these days need a coat of paint, and about half the storefronts are empty.
“Who would have thought when these tariffs were proposed that they would affect us right here?”
Terry Vickers, director of the Fairfield County (S.C.) Chamber of Commerce
In 2013, then-Gov. Nikki Haley stood with Walmart CEO Bill Simon, chief buyer for Element TVs, and held up the Winnsboro plant as an example of global trade working for rural America.
Fairfield County leaders had pulled out all the stops to lure the nation’s only television assembly plant to Winnsboro. All the parts in its five American-model TVs are Chinese, company owners acknowledge. But it was residents of the largely rural Fairfield County who would be bolting them together for sale at Walmarts across the country, including the one right there in Winnsboro that would close a couple years later.
The county used a $1.2 million state rural development grant and $600,000 in borrowed cash to buy the old Manhattan Shirt Co. that it could lease to Element Electronics for $1 a year.
A century of decline
The county’s population reached its zenith in 1910 when it stood at 29,442. Five out of the next six census counts saw declines, with a low of 19,999 by
1970.
Buoyed by the Mack Truck factory that opened in 1987, the population surged to nearly 24,000 by the early
2000s. But Mack Truck left town in
2002, and the company that bought the abandoned plant a couple years later shut down in 2011.
Since 2010, 100 to 200 people have left Fairfield County every year.
In 2016, the local Walmart closed, taking with it 165 jobs. A year later, the aborted V.C. Summer nuclear power plant expansion cost Fairfield County another 250 to 300 local jobs.
By fall of 2017, one of the communi- ty’s oldest employers – a century-old tire-cording maker – had also shut down, costing another 240 jobs. And now tariffs threaten an additional 126 jobs at Element.
‘Assembled in America’
Entering 2018, Element was already operating on zero profits because of an existing 4.5 percent tariff on flat screens its owners had expected would be lifted a couple years ago, said Davenport, the economic development director.
Legislation to lift that tariff is set to be passed, Davenport said, but Trump’s new tariffs have rendered those efforts moot.
It was on July 6 that Element got caught in the Trump administration’s tariffs on a range of Chinese raw materials and components worth $34 billion. Tariffs on an additional $16 billion in goods are to go into effect Aug. 23. This comes on the heels of broad import tariffs on washing machines, solar panels, steel and aluminum earlier in the year.
As the situation stands, China can export components to Mexico, where factory workers can assemble TVs and export them to the United States at no cost. Consumers still get their TVs, but no Americans get jobs.
Element spokesman and chief counsel David Baer testified in May before the U.S. trade representative on how his company leveraged global supply chains to create jobs in the rural community. The flat screens that modern TVs rely on are not manufactured anywhere in the United States, he testified, and should be allowed to come into the country without any tariffs.
Still, Davenport said, he wishes Element could just stay.
“It’s a lot less expensive to keep Element Electronics here than to recruit a new company,” he said. “The cost per job – think about that.”