Business owner faces tariff impact, still supports Trump

For nearly 35 years, Wyoming entrepreneur Alan Chadwick has managed his company, importing apparel from China and distributing Western-style clothing to retailers serving “working cowboys” across the US. Now, with former President Donald Trump campaigning on a promise to impose a 10%-20% tariff, or border tax, on all imported goods, a rate that would escalate to 60% for products from China, Chadwick is compelled to fundamentally reconsider his operational strategy. The 66-year-old has been exploring options to relocate the manufacturing of his products, such as wool shirts with snaps and canvas jackets, to India or Pakistan, or potentially to close his Wyoming Traders business, which employs 16 individuals, and retire entirely. Chadwick characterized tariffs as a “tax on the American people” and cautioned that the expense for a company like his to establish a factory in the US was not realistic. Nevertheless, as he prepares to cast his vote, he anticipates setting aside his reservations about tariffs in favor of other priorities, including illegal immigration and opposition to abortion. He affirmed, “I will vote for Trump even though he’s going to hurt our company if he does what he says he’s going to do.” Chadwick’s willingness to overlook Trump’s stance on tariffs exemplifies the conflicting motivations influencing American politics. The Republican Party’s platform has steered America, once a global proponent of free trade, towards embracing policies designed to safeguard US companies and jobs from foreign competition, despite potential economic drawbacks. During his initial term, Trump imposed tariffs on thousands of items from China—measures that President Joe Biden, despite having criticized them before entering the White House, maintained. This year, the Republican has positioned plans for widespread tariffs at the core of his presidential campaign, describing such duties as “the most beautiful word in the dictionary.” He contends that his proposals—which analysts suggest could elevate the average charge on imports to its highest level in at least 50 years—will stimulate job creation, revitalize US manufacturing, increase wages, and generate billions of dollars from other nations. He has stated on the campaign trail, “We’re going to be a tariff nation. It’s not going to be a cost to you, it’s going to be a cost to another country.” Most traditional economists reject his claims, asserting that the policy would do little to expand employment in the US, while simultaneously increasing costs for everyday Americans and hindering global economic growth. In the US, the Tax Foundation predicts that the tariffs would lead to a reduction of 684,000 jobs overall and a 0.8% decrease in GDP—and that is without considering the almost certain retaliation from other countries. For a typical US household, costs would rise by at least $1,700, according to the Peterson Institute for International Economics, which provides one of the lower estimates available. Economist Wendy Edelberg, director of the Hamilton Project and senior fellow at the Brookings Institution, remarked on Trump’s promises, saying, “It’s absurd.” She added, “This is not the panacea that people are hoping for.” Despite these warnings, some surveys indicate that Trump’s ideas are resonating: a September poll by Reuters/Ipsos found that 56% of likely voters favored the Republican’s tariff plans. Kyle Plesa, a 39-year-old Trump voter in Miami, Florida, stated that he did not believe tariffs would have precisely the impact the candidate has promised, but the Republican’s focus on the drawbacks of globalization had struck a chord. He said, “People are upset about it and I think Trump is at least addressing it.” He further added, “I would probably prefer protecting business and paying a little bit more due to tariffs than I would dealing with the current state of inflation and raising taxes from the left.” Democratic presidential nominee Kamala Harris has criticized Trump’s plans for tariff expansion as a “national sales tax,” pledging a more targeted approach. However, Trump has suggested that revenue collected from tariffs could enable significant tax cuts—sometimes floating the idea of eliminating income tax altogether. Meanwhile, President Joe Biden’s decision to maintain Trump’s China tariffs—and to expand them on items such as electric vehicles—has also allowed the Republican to claim a policy victory. Biden has also endorsed other protectionist policies, such as historic government spending to boost manufacturing in sectors like semiconductors and green energy. Both Biden and Harris, similar to Trump, have opposed the acquisition of US Steel by a Japanese company on national security grounds, causing apprehension in the business world regarding foreign investment. Michael Froman, who served as the US trade representative under former President Barack Obama, commented that Washington’s increasing reliance on tools like tariffs and restrictions on foreign investment was “probably here to stay.” He observed, “There certainly is less enthusiasm around pursuing what we might call an affirmative trade agenda in terms of liberalisation, openness, reduction of barriers.” He concluded, “We just have to recognise that none of these policies are actually free. They all impose some kind of trade-off.” Jason Trice, the co-chief executive of Jasco, an Oklahoma-based lighting and electronics company that sells to major retailers such as Walmart, indicated that his firm’s experience illustrates the harm tariffs can inflict. Since 2019, it has paid hundreds of millions of dollars in tariffs while transforming its supply chain, relocating the majority of its manufacturing from China to places such as Vietnam, Malaysia, and the Philippines. He stated that these changes have made his firm less efficient and increased costs by approximately 10%-15%, which he has passed on to retailers, ultimately raising prices and contributing to inflation. These factors have negatively impacted his business, which has seen revenue fall 25% since 2020 and its staff numbers drop, through attrition, from 500 to 350 employees. Trice remarked, “In 50 years in business, the Chinese government has… never done anything nearly as damaging to our business as what the Trump administration has done.” He added, “Tariffs have not helped bring jobs back to America. Tariffs have hurt American businesses and reduced employment opportunities.” Lucerne International, a Michigan-based car parts supplier that has manufactured in China for decades, has also spent the past few years adapting to the new economic climate. With assistance from government incentives, the company is now working to establish its first factory in its home state by 2026, a plan expected to create more than 300 jobs over four years. However, despite the project appearing to be the kind of successful “reshoring” that politicians in both parties desire, chief executive Mary Buchzeiger, a long-time Republican, asserted that it was a mistake for the US to attempt to “build walls” against its rivals. She stated, “I don’t think tariffs are a long-term solution.” She concluded, “All we’re going to do is continue to make ourselves uncompetitive on a global scale.” Michelle Fleury contributed to this report. North America correspondent Anthony Zurcher provides analysis of the race for the White House in his twice weekly US Election Unspun newsletter. Readers in the UK can sign up here. Those outside the UK can sign up here. Copyright 2024 BBC. All rights reserved. The BBC is not responsible for the content of external sites. 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