Jamestown Businesses Eye Tariffs

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Lakewood's 1 million sq ft engine plant is a key component of Cummins' world wide operations.
Lakewood’s 1 million sq ft engine plant is a key component of Cummins’ world wide operations.

Contributing Writer
Walt Pickut

Greater Jamestown and Chautauqua County make many products sold around the world and use many products made around the world. “Anything that shakes the world shakes us,” a local employer told the Jamestown Gazette last week. “Washington’s new tariffs are a big deal!”

Jamestown lost a third of its population and much of its industry a few decades ago due to the overseas flight of work and the reshuffling of production within the United States. Today, the word “Tariff” has many local manufacturers, farmers and workers holding their breath in fear of a repeat.

The current administration in Washington has recently imposed or proposed more than $200 billion in tariffs on thousands of products imported from some foreign countries.

The Tariff Shield

Tariffs are supposed to help Americans produce more and create more jobs by blocking unfair competition from abroad.

Tariffs limit imports from other countries. Foreign products are charged a toll to enter the country. That raises the price on foreign goods and makes Americans less likely to buy them. This is supposed to help Americans sell more American-made products and create more American jobs. Tariffs, however, quickly become complicated.

Jamestown Gazette readers who would like to read the actual document that describes the most recent tariff proposal, OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Docket No. USTR-2018-0005, summary of the proposal, and a more than 60-page list of items proposed for import tariffs, can refer online to: https://ustr.gov/sites/default/files/files/Press/Releases/301FRN.pdf.

Some categories are as broad as large industrial and livestock equipment, hundreds of steel and aluminum alloys, and lasers of any kind. Others are as narrow as Co-enzyme Q-10 and Centrifugal clothes dryers, with total tariffs that may balloon to $500 billion.

Good, Bad or Nothing?

A number of local business owners have cautioned that opinions and rumors sometimes get ahead of facts. “It’s hard to say what the impact is going to be,” said Mark Geise, County of Chautauqua Industrial Development Agency (CCIDA) CEO. “We’ll have to see how things shake out. I’m waiting for the data.”

The Gazette’s unofficial survey of local industrialists and elected officials, however, shows that patience is competing with a sense of danger. “In my first 100 days in office,” Chautauqua County Executive George Borello said, “I’ve found that many local businesses live and die on tariffs and the price of their raw materials. I completely agree that the United States has tolerated unfair foreign trade practices for far too long. We have to push back.”

Some have described the current administration’s tactic as “Firing the first shot.” This, naturally, invites retaliation from abroad, according to Borello. “Business hates the kind of uncertainty and unpredictability created by changing tariffs,” he added, “but I’m committed to preventing collateral economic damage in Chautauqua County.”

Time to Speak

The above noted document is titled, in part, “Notice of Determination and Request for Public Comment Concerning Proposed Determination of Action [emphasis added]. The tariff proposal expressly calls for the public to respond by direct communication with their Representatives and Senators in both Albany and Washington during a two-month review process, with hearings slated for August 20 through 23. “Every citizen has a line to the President through congress,” Borello said. “This is the time to use it.”

Cummins Speaks Out

“Cummins is having a good year,” Jon M. Mills, corporate spokesman for Cummins, Inc., assured the Gazette. “Jamestown is an important site for Cummins and we are committed to doing our part to make the Jamestown community a stronger, more vibrant community.”

In response to the Gazette’s question about Cummins’ position on the recently proposed and imposed tariffs, Mills added, “Risking a trade war with more tariffs will only invite more retaliation that will cause significant harm to the U.S. economy and hurt American businesses, workers and farmers. We believe the Administration should be squarely focused on the long-term economic objective of protecting U.S. workers and businesses.

The tariffs will directly impact the production costs of our plants in Indiana, Minnesota, New York, North Carolina, South Carolina, and Tennessee. We will also likely be subject to pass through tariff costs from our second tier suppliers, which could also be significant. At the end of the day, American businesses and consumers all suffer as the increased costs get passed through and down.

Currently, 95 percent of the world’s consumers reside outside the United States. For Cummins to continue to be successful and add new jobs, it is imperative we are able to access these consumers with high-quality and competitively priced products.

We believe the only way to create a level playing field for U.S. businesses in China is for the United States to seek commitments from China on lasting market reforms in key areas through meaningful discussions – not through tariffs.”

Other Reactions

“We have no choice in the short run but to pass on our higher cost of raw materials, for example steel and aluminum from Canada, to our customers,” said Richard Turner, Chairman and CEO at Blackstone Advanced Technologies LLC in Jamestown. “It’s not a long-term solution, though.”

Employees and customers of Blackstone, as at many other local industries, may suffer long-term economic harm due to circumstances beyond local control. Turner, however, says alarm might be premature, but only if negotiations triggered by the new tariffs are successful.

“Though the U.S. market is a bit unstable for power vehicles at the moment,” said Matt Eyring at Harley Davidson in Falconer, “media reports and rumors that Harley Davidson is moving all its manufacturing out of the U.S. are simply false. The company is enlarging its facilities in York, PA, for example, to better serve the U.S. A lot of new things are coming at Harley,” Eyring added. “We’ll have to wait and see if there is an agreement on tariffs before we hear of any other decisions.”

Stay Tuned

By all indications, industrialists, employers and elected officials in the Greater Jamestown area and throughout Chautauqua County are aware of the possible serious repercussions of the new tariff conditions created by the U.S. administration. Some have warned of an impending “trade war” between the U.S., its allies and international trading partners, a widely admitted possibility.

The Jamestown Gazette’s informal, unofficial survey of local business leaders and politicians finds a realistic appraisal of the possible dangers, as well as advantages if negotiations are successful in creating a “more level playing field” for the U.S. in the world’s trading environment.

Blackstone’s Turner also voiced a common thread among employers who all said they are on the same side as their employees in this situation. “Our employees are our most important asset.” Local employers are as much a vital part of the community as their workers. Patience, vigilance and activism are all apparently called for in deliberating the need for new international trade tariffs. What shakes the world, shakes Jamestown.

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Walt Pickut
Walt Pickut’s writing career began with publishing medical research in1971 while working at the Jersey City Medical Center and the NYU Hospital and School of Medicine. Walt holds board registries in respiratory care and sleep technology as well as bachelor's degrees in biology and communication, and a master's degrees in physiology from Fairleigh-Dickinson University in New Jersey, with additional graduate work in mass communication completed at SUNY Amherst. He currently teaches Presentational Speaking in the Houghton College PACE program at JCC and holds memberships in the Society of Professional Journalists and the American Society of Business Publication Editors. He lives in Jamestown with his wife Nancy, an MSW social worker, and has three children: Dr. Cait Lamberton in Pittsburgh, Bill Pickut, a marketing executive in Chicago, and Rev. Matt Pickut in Plymouth, IN.