From Bicycles to Beans, Wisconsin Is Caught In The Crossfires of President Trump’s Trade War

QUOTE FROM BRIAN KUEHL, FARMERS FOR FREE TRADE EXECUTIVE DIRECTOR: “Wisconsin’s economy is getting crushed by tariffs. These taxes make it harder for businesses to keep their doors open and force families to pay more for everyday items. From higher costs to loss of export markets, our farmers, manufacturers, and retailers are all feeling the pain caused by tariffs. Without a new approach to trade, those costs will continue to rise and they will continue to hurt Wisconsin workers, families, and businesses.”

THE LITTLE GUYS ARE ‘GETTING CRUSHED.’ “It’s been catastrophic,” said [Rob] Parmentier, president and CEO of Marquis-Larson Boat Group, which builds Carver yachts in Pulaski. 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. … 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.” (Rick Barrett, “As Tariffs Continue, Panic Beginning to Sink in Among Wisconsin Manufacturers, Milwaukee Journal Sentinel, 10/22/18)

  • “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.” (Rick Barrett, “As Tariffs Continue, Panic Beginning to Sink in Among Wisconsin Manufacturers, Milwaukee Journal Sentinel, 10/22/18)

EQUIPMENT MANUFACTURERS: TARIFFS “ARE NOT A GOOD END GAME.” “From bicycles to beans, Wisconsin and much of the nation are caught in the crossfires of President Donald Trump’s trade war. Starting Monday, the Trump administration will begin taxing $200 billion more in Chinese goods. The tariffs will start at 10 percent and rise to 25 percent in 2019. The product list is huge, and it includes goods from some of Wisconsin’s most well-known companies, such as Waterloo-based Trek Bicycle Corp. If Trump delivers on the 25 percent tariff, Trek says it would pay an additional $30 million in tariffs each year on bikes imported from China. ‘Trek will be forced to pass these costs on to the consumer,’ Roger Gierhart, Trek’s vice president of marketing and supply chain, said in recent testimony before the U.S. International Trade Commission.” (Rick Barrett, “New Tariffs Threaten Wisconsin’s Trek Bicycle, Soybean Farmers As Trade War With China Heats Up,” Milwaukee Journal Sentinel, 9/21/18)

  • “‘Tariffs, as a strategy, are not a good end game for trade or manufacturing,’ said Dennis Slater, president of the Association of Equipment Manufacturers, a Milwaukee-based trade group that represents agricultural and construction equipment makers. ‘If a company is looking at an expansion, they’re probably going to hold off until they get through some of this. And the time and energy spent dealing with the changing landscape of tariffs is a huge distraction,’ Slater said.” (Rick Barrett, “New Tariffs Threaten Wisconsin’s Trek Bicycle, Soybean Farmers As Trade War With China Heats Up,” Milwaukee Journal Sentinel, 9/21/18)

TRADE WAR HAS CREATED ‘MONTHS OF ANXIETY’ FOR WISCONSIN MANUFACTURERS. “The trade war between the United States and China has made for a nerve-wracking summer of uncertainty in Wisconsin, where manufacturing has long been in decline yet remains a vital part of the state’s economy. At Johnson Level and Tool in suburban Milwaukee, the Trump administration’s thrust-and-parry trade moves with China and other countries have left the company bracing for up to $3.7 million in extra costs annually because of higher tariffs on imports, including some of its levels that are made in China. … ‘We have this uncertainty, and almost overnight our business really has changed and so the competitive landscape is different,’ [CFO Paul] Buzzell said.” (Ivan Moreno, “Months of Anxiety for Wisconsin Manufacturers Amid Trade War,” Associated Press, 10/11/18)

CINDY BROWN, PRESIDENT OF CHIPPEWA VALLEY BEAN: “HONESTLY, I DON’T UNDERSTAND WHY FARMERS AREN’T TAKING THEIR TRACTORS DOWN PENNSYLVANIA AVENUE IN PROTEST.” It’s a different story at Chippewa Valley Bean, which buys beans from 100 family farms located throughout the Midwest and processes them at its Menomonie factory that employs 33 people. Brown said the company in 2017 earned $25 million on export sales, which account for 60 percent of the company’s business. It has been recognized twice by the state for its international sales prowess that focuses on food safety and the quality of dark red kidney beans craved in Europe and other parts of the world. It also has overwhelmed competition from China because it does a better job of honoring contracts and working with customers, Brown said. ‘The entire world was poised to buy our beans,’ she said. ‘I don’t know what’s going to happen now.’” (Rob Schultz and Mark Sommerhauser, “State Producers Battling Through Trade War,” Wisconsin State Journal, 7/2/2018)

TARIFFS LED MILWAUKEE-BASED HARLEY-DAVIDSON TO MOVE PRODUCTION OVERSEAS. “The quintessential American brand, Harley-Davidson, is shifting some production overseas to avoid EU regulatory tariffs — but not without some commentary from the President Donald Trump. Even with President Trump’s disapproval, the Milwaukee-based company views offshore production as ‘the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe.’ The Trump administration slapped tariffs on imported steel and aluminum from the EU, Mexico, and Canada, earlier this month.” (Carson Kessler, “Why Harley-Davidson Is Moving Production Overseas,” Fortune, 6/26/18)

WISCONSIN COMPANIES LOOK TO MOVE PRODUCTION OVERSEAS AMID TRADE WAR. “Regal Ware, a West Bend manufacturer of cookware with 322 employees, says about 50 jobs are at risk from the tariffs. ‘We are now in a position where we need to explore the possibility of manufacturing some of our product overseas,’ said Doug Reigle, a company vice president in supply chain management. ‘It is doubtful we would put any more major investments into our facilities as long as the current conditions exist. We have slowed down hiring even though we have 13 open manufacturing positions,’ he added.” (Rick Barrett, “Trump’s Trade War Sweeps Across Wisconsin, Raising Prices And Putting Jobs At Risk,” Wisconsin Journal Sentinel, 7/24/18)