Tariffs could make fireworks fizzle
US FIREWORKS INDUSTRY HAS NOWHERE ELSE TO GO BUT CHINA TO BUY THEIR WARES Trump has suggested that companies can sidestep tariffs by moving manufacturing to the US, That is not an option for domestic fireworks sellers.
The escalating trade clash between the US and China has sent thousands of US companies scrambling to determine whether they can import goods from other countries to escape higher tariffs. But when President Conald Trump threatened to tag large penalties on $300 billion in Chinese imports earlier this month, a sense of panic settled over the fireworks industry. It had nowhere else to go.
“It’s virtually impossible for our product to be made anywhere else but in China,” said Bruce Zoldan, the chief executive of Phantom Fireworks in Youngstown, Ohio. “If these tariffs happen, it’ll be the greatest threat to our industry.”
Zoldan met White House officials on Wednesday to press his case, and he is working on a formal request that he hopes would exempt the fireworks industry from the penalties. A final decision by the White House could come in late June, in the midst of the fireworks industry’s busiest period.
Collateral damage
After several months of negotiations between the White House and Beijing that left many believing a truce was within reach, a messy unravelling has left many business executives wondering how to avoid collateral damage.
Trump’s showdown with Beijing has nothing to do with fireworks, but they have nonetheless been brought into the fray of the ■ Amount (in pounds) of fireworks imported into the US each year Rise in Americans’ spending on fireworks since 1998 trade war and its headline issues: trade imbalances, government subsidies, intellectual property and global economic health. And while Trump has repeatedly suggested that companies can sidestep the tariffs by moving manufacturing to the US, that is not an option for domestic fireworks sellers.
Today, of the 250 million pounds of fireworks that are imported to the US each year, nearly 95 per cent come from China, according to the American Pyrotechnics Association. Trump has not yet imposed tariffs on fireworks, but it was recently added to a list of products that would face a 25 per cent penalty if China doesn’t reach a broader deal with the White House soon. And if fireworks aren’t removed from that list, executives said they will not be able to absorb the costs.
“The fireworks stands and tents you see in grocery store parking lots and on the roadsides serve as fundraising opportunities for organisations like school boosters, churches and veterans’ organisations,” the National Fireworks Association said in a news release after the tariffs were announced. “With an unfair tax that serves to raise the cost of firework devices so significantly, we’re hurting the very organisations that make up the fabric of America.”
In recent years, as states have loosened the regulatory tethers and Chinese manufacturers have raised safety and production benchmarks, fireworks sales have swelled. Americans spent nearly $900 million on sparklers, roman candles and other glowing bursts in 2018 — a more than 300 per cent increase since 1998.
Steven Houser, secretary of the National Fireworks Association, said he’s heard from many of the group’s 1,200 members, who are frantically trying to understand what’s happening.
“They listen to the news and hear them say tariffs and they think the sky is falling,” said Houser, who also owns and operates a wholesale fireworks company called Red Rhino Fireworks in Missouri.
The industry — including groups like the National Fireworks Association and the American Pyrotechnics Association — is now mobilising and hoping to finesse an exemption for fireworks before the list of impacted imports is finalised and the tariffs take effect July 1.
The American Pyrotechnics Association on Thursday filed a request to testify during the US Trade Representative’s public hearing for the latest round of proposed tariffs on June 17.