Alabama companies brace for impact as trade uncertainty grows

Brian Harold says the Port of Mobile's biggest trading partner is China. (Source: Gray DC)
Brian Harold says the Port of Mobile's biggest trading partner is China. (Source: Gray DC)(GRAYDC)
Published: Aug. 29, 2019 at 4:32 PM EDT
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Alabama businesses are paying close attention as President Donald Trump stands by his escalation of trade battles with China. The president recently tweeted he will increase tariffs on $550 billion worth of Chinese goods, some of those starting September 1. Companies in the Yellowhammer State are bracing for impact.

“Of course they’re a concern and I keep an eye on it,” said Brian Harold, managing director of APM Terminals at the Port of Mobile.

Harold says they are cruising along, for now.

“We haven’t seen a huge impact in the containerized cargo moves in and out of the Port of Mobile because of tariffs...not yet,” said Harold.

Harold says his operation will keep growing as the region sees continued expansion in manufacturing and chemical plants. The Port naturally relies on global relationships. They say they exported $2.64 billion worth of goods in 2017. While their relationships span the whole globe, Harold does not downplay China’s importance to his operation.

President Trump announced he plans to increase tariffs from 10 percent to 15 percent on $300 billion in Chinese goods starting September 1. The other hike, from 25 percent to 30 percent on another $250 billion in Chinese goods, comes into play on October 1. Harold says if relations become irreparable, he will feel it.

“Of course that would be the biggest hit for us. China’s our biggest trading partner,” said Harold.

Manufacturing is historically the back bone in Alabama. Business leaders say the industry is booming. But, they concede continued tariff retaliations could hammer businesses.

Birmingham Fasteners is American supplied, American made, and American sold. Kevin Johnson, vice president of manufacturing says the company had to tighten up their shop following the administration’s 25 percent tariff on imported steel in 2018.

“It definitely put our profit back a few years. Two or three years,” said Johnson.

Johnson thinks U.S. trade deals need renegotiating across the board, but he says since the administration imposed tariffs, his company is paying more for the same U.S. steel he was already buying. Rather than passing the price increase onto consumers, he says his company is eating the cost.

“We had to, you know, eliminate a couple of positions and combine jobs where we could,” said Johnson.

Profits are down...but the furnaces keep burning and product keeps spitting out. Johnson simply wants a resolution sooner rather than later. The Mobile Chamber of Commerce says Alabama ranks number eight in states’ exposure to retaliatory tariffs.

“We won’t knock the administration on trying something to help us...gotta think of the greater good,” said Johnson.

President Trump is back in Washington after the G-7 Summit in France. The president touted a successful summit. In a press conference in Biarritz, the president said he thinks the Chinese government wants to make a deal because they have no choice. As of now negotiations are up in the air.

Senator Doug Jones (D-AL) will have a say in that approval, but for right now he is concerned with the tariff escalation.

“We all want fair trade deals, but right now the Administration is hurting Americans with these escalating tariffs. We can’t afford to keep paying that price – the trade war needs to end,” said Jones.

His Alabama colleague in the House Rep. Mike Rogers (R-AL) says he is looking to the future.

“When it comes to trade, he has long said that these short-term periods of turbulence will occur while he untangles many of the unfair policies of the past. In the end, our producers will be in a better place over all. I trust President Trump in these negotiations,” said Rogers.

Passage of the United States-Mexico-Canada-Agreement, (USMCA) also awaits Congressional approval. The White House is hoping a decision is made on the agreement when lawmakers return to Capitol Hill in September. The USMCA would serve as a renegotiated North American Free Trade Agreement (NAFTA).

Copyright 2019 Gray DC. All rights reserved.

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