Investments put on hold, reflection on possible relocation, many companies in the United States are preparing, less than a month before the presidential election, for the possible increase in customs duties and expect to enter a zone of economic turbulence.
Because customs duties are no longer a dirty word in Washington: Vice-President Kamala Harris, Democratic candidate, is part of a government which has retained those put in place on Chinese products by former President Donald Trump, and even added more targeted ones.
As for the Republican candidate, he has already announced at least 10% customs duties on all imports, and even up to 60% on those coming from China.
The tariffs “are going to make our country rich again,” he said in a Fox News interview broadcast Sunday, saying that without them, “we have a screwed country.”
But for entrepreneurs, like Robert Actis, this above all complicates things.
Since 2020, and the implementation of customs duties on imports of steel and aluminum, the latter has found it increasingly difficult to find raw material suppliers, and President Joe Biden’s recent measures have nothing to do with it. arranged.
“I would be happy to buy American but no one makes it,” he says, referring to the mesh for the construction sector that he has to import.
If he has been able to benefit from exemptions from customs duties so far, they must be renewed annually, without guarantee, additional costs according to him, which have gradually pushed his prices upwards.
– Lack of labor –
And many industries are affected: the American Apparel Association (AAFA) has estimated that retail prices have increased annually by 5 to 10% since 2020.
“At first, our members reduced their margins” but the difficulties of the sector no longer allow it, underlines the vice-president of the AAFA, Nate Herman.
And customs duties do not necessarily benefit local industry: 14 textile factories have closed down in recent years and certain products are no longer manufactured locally, due to a lack of qualified labor and machinery.
“The average age in American factories has risen to around 50 because we cannot recruit younger people,” insists Mr. Herman.
Above all, they represent “millions of dollars for small businesses like us”, insists Ray Sharrah, general manager of Streamlight, which produces lighting fixtures, “we have to pay for it and in the end it goes to the consumer, that’s the problem for n ‘any customs duty’.
The approach of the elections, on November 5, reinforces the worst nightmare of entrepreneurs: uncertainty.
According to a survey carried out in particular by the Richmond branch of the Federal Reserve (Fed), 30% of companies announce that they are postponing, reducing or even canceling planned investments because of the election.
– “Inflation is coming back” –
“This slows down our actions, our investments and generally creates a moderating effect on economic development as a whole,” points out Mr. Sharrah.
With his partners, he is trying to repatriate the manufacturing of an essential component to the United States but “the time we spend working on our supply chains comes at the expense of the development of our company”.
And finding new sources of supply is not easy, underlines the AAFA, which expects to see companies import more heavily to have stocks before a possible increase in customs duties, as in 2018.
Regardless of the outcome of the vote, businesses anticipate customs duties to be maintained.
“There is no chance that one of the camps will abandon them,” believes Mr. Actis, “the movement will be on the rise.”
For the boss of Colonial Metal Products, Will Thomas, companies can’t do much about it because “candidates are playing on emotions. But if the products are no longer available and all you do is increase production costs than is happening? Inflation is coming back.”
“I am not against customs duties, as long as there is a project or support to help companies bring back production, but it is on this point that I have heard nothing,” regrets his side Colby McLaughlin, boss of Trim Illusion, importer of automobile parts.
He is torn between his perspectives as an entrepreneur and his vision as a citizen. In the meantime, it plans to strengthen its investments to accelerate its revenues.
