Some N. Central Businesses Feeling Tariffs’ Pinch
By Mina Corpuz
The latest round of tariffs on $200 billion worth of Chinese goods has some businesses in North Central Massachusetts already seeing price increases or preparing for them.
“We’re seeing this hit our customers -- which affects our business -- and we’re doing what we can to manage it,” said Andy Crosby, president of ABCrosby and Company, a family-run custom furniture manufacturer in Ashburnham. “It’s difficult for us to minimize.”
Furniture with metal bases that the company resells have seen an 6 to 8 percent increase because of the tariffs, he said.
A couple thousand products, including types of fruit and nuts, toilet and tissue paper, and home appliances like refrigerators and air conditioners will be more expensive to bring into the country. Types of steel and wood, furniture, and paper products are also on the list.
The tariffs, which went into effect Monday, start at 10 percent and will rise to 25 percent on Jan. 1.
The goal of the tariffs is to ”(eliminate) China’s harmful acts, policies and practices” that hurt American workers and businesses and have allowed the country to unfairly acquire U.S. technology and intellectual property, according to a press release from the Office of the United States Trade Representative.
In the region, some businesses are trying to keep their costs steady and avoid passing increases on to customers.
To help minimize some of the costs, ABCrosby has asked them to place orders sooner rather than later.
Crosby is monitoring tariffs or costs associated with lumber and metal, which go into furniture making. He is also listening to what his vendors are saying and what his competitors are doing to gauge what kind of action to take.
At Viola’s Fitchburg Tire and Service, Operations Manager John Viola said they are watching for how this round of tariffs will impact tire prices.
“It’s a wait and see,” he said.
The family-operated company has felt the impact from steel tariffs imposed earlier in the year, he said.
About 75 percent of the tires, car parts, and other products the businesses buys are from overseas, with a majority coming from China, Viola said.
Raising the rate for labor has helped absorb any increases that may have come from the tariffs, he said.
With business booming from people moving to the region from the Boston area, Viola isn’t too concerned about the tariffs and hopes that their impact is short-term.
For companies that haven’t felt the squeeze from tariffs, it’s a matter of when prices will start to increase.
“At the moment, it’s not on our radar and it doesn’t seem to be an issue,” said Jeff Schwarz, owner of printing services company ISS in Shirley.
ISS works with industrial distributors to buy larger pieces of paper that they cut, he said. So far, none of them have mentioned price increases.
“We’re keeping our heads very low and hoping that they miss us,” Schwarz said.
If there were a 5 to 10 percent increase in paper prices, that could translate to a 1 or 2 percent sale cost increase for the business cards, fliers, and marketing materials the company makes for businesses, he said.
While some businesses are cautious about the tariffs, Jeff Fleming, general manager of Acme Carpet One Floor and Home in Lunenburg isn’t worried because the company buys most of its products domestically.
He welcomes the tariffs as an opportunity to re-examine trade with China.
“It’s probably a good thing that this is happening now,” Fleming said. “We’ve got this type of product made mostly over there and they’re controlling it.”
The tariffs may have some impact on business through an increase for products like bamboo, cork, and a new type of flooring made mostly in China, Fleming said.
Even if it becomes too expensive to buy from China, stores can import from elsewhere, buy domestically, or switch product, he added.
“If the prices stick, there could be some backlash from buyers like us,” Fleming said.
As smaller businesses wait out or embrace the tariffs, large retail companies are opposed to them. Many, including Walmart and Target, filed letters to U.S. Trade Representative Robert Lighthizer about the negative impact they could have.
“As the largest retailer in the United States and a major buyer of U.S. manufactured goods, we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers and the U.S. economy as a whole,” Walmart wrote in its letter.
The increased duties would translate into cost increases for customers or less for suppliers, the retailer warned.
Manufacturers often buy parts from China to assemble and finish products in the United States, the letter says.
Also, shifting production outside of China wouldn’t be a viable option for many of the products targeted by the tariffs, Walmart wrote.
Follow Mina on Twitter @mlcorpuz.