Some Pennsylvania Businesses Say Trade Tariffs Have A Significant Impact

Oct 10, 2019

A group of southwestern Pennsylvania business owners say tariff-related price increases have directly affected their ability to do business. At a panel in the Pittsburgh’s Hazelwood neighborhood on Thursday members of the nonprofit, chemicals, manufacturing, and agricultural industries addressed how the Trump administration’s trade tariffs directly are impacting them.

“We have done everything we’ve been able to, to mitigate the rise in prices, but because we kept our prices so low for so many years, we could not possibly absorb these tariffs,” said Cribs for Kids executive director Judy Bannon. The 21-year-old nonprofit began as a response to high levels of Sudden Infant Death Syndrome (SIDS) in the region and leads educational programs for new families about the dangers of unsafe sleep environments. It also provides cribs to more than 1,600 organizations across the region.

When it began supplying cribs, Bannon said it charged places like hospitals and health centers $49.99 for their signature product, the Cribette. But in the past year due to tariffs on Chinese-manufactured play yards, Cribs for Kids has raised their prices to $59.99. Some places can’t afford the increase, which leaves fewer infants with access to cribs.

“It has impacted us tremendously not only with fewer babies being able to get safe sleeping environments, but just with the time and energy that we've had to put in to talking to partners explaining the tariff situation to them,” Bannon said.

Soybean and corn farmer Rick Telesz said he’s been struggling to maintain a profit at his Lawrence County farm. Tariffs have a big impact on the agricultural industry, he said, because he has a limited time to plan for his harvest and the associated costs.

“All my inputs are affected by tariffs and everything I sell was affected by a tariff so I'm taking a negative hit on both ends,” Telesz said. “If you can't invest in new capital eventually everything you have gets worn out and obsolete …  I don't have the capital to invest in new technology new equipment. So down the road eventually I am out of business.”

The panel was organized by the interest group Tariffs Hurt the Heartland, which campaigns against tariffs on American companies, and estimates that Pennsylvania taxpayers have paid $981 million so far in additional tariffs.

From left to right: Steve Lamar, executive vice president, American Apparel & Footwear Association; Judy Bannon, executive director, Cribs for Kids; Lance Ruttenberg, president and CEO, American Textile Company; Ed Brzytwa, director of international trade, American Chemistry Council; Erica Owen, associate professor, Graduate School of Public & International Affairs at the University of Pittsburgh; and Rick Telesz, soybean and corn farmer from Lawrence County.
Credit Katie Blackley / 90.5 WESA

President Trump claims that trade with China was not fair to begin with, saying that the shift will ultimately help American manufacturers.

University of Pittsburgh Graduate School of Public and International Affairs associate professor Erica Owen said the administration asserts that China will “pay for the tariffs,” but that’s not the reality. She estimates American consumers will spend an additional $700-$1,000 this year because of the tariffs, which will disproportionately affect low and middle-income families.

“[That increase] means a lot more and hurts a lot more to families that are already struggling to sort of make ends meet,” Owen said.

Lance Ruttenberg with the bedding manufacturer American Textile Company says each time the federal government releases a list of products impacted by the tariffs, he has to rethink his business plan.

“Our costs are going up, our demand, we expect, will go down, and the consequences will be negative,” Ruttenberg said.

Manufacturers can apply for exclusions that would exempt their products from higher tariffs. But Ruttenberg said the process is time-consuming and comes with no guarantee that prices will be stable for more than a year. He cited a recent visit to Washington D.C. where he spoke with people on Capitol Hill about how often businesses apply for the exclusions.

“The reliance on the exclusions as relief, in some way, is evidence that there’s something wrong with the tariff program itself,” Ruttenberg said. “So I’m very confused by the strategy of the companies to rely on the exclusion process versus not having tariffs in the first place.”