St. Paul-based manufacturer Dan Digre is still suffering from tariffs on imported Chinese products put in place by former President Donald Trump, to the tune of 25% on the raw components his company uses to produce high high-end industrial speakers.
“The Chinese don’t pay it, like Trump said. We do,” said Digre, owner of Misco.
Moreover, the tariff for finished products like speakers is only 7.5%, he said, further complicating his business.
Components imported by Misco are not cost effective to produce in the United States
It adds another layer of pressure for Digre’s 80-person business, which barely held its own in St. Paul for several years, thanks to the import tax.
“Our strength is the design, manufacture and assembly of all products into a finished product,” Digre said. “Normally, because our [overall] sales increased, we would grow here.”
Some major industries and businesses have negotiated tariff reductions and exemptions.
Digre is a small, high-end producer in a nearly extinct speaker industry in the United States. And Misco, started by Digre’s father as a radio speaker repair business after World War II, has no national influence.
Trade groups have pushed President Joe Biden to roll back tariffs set to expire this month on the $350 billion worth of goods, from farm products to vehicles, imported each year from China. But so far, China has only kept 60% of its promise to buy an additional $200 billion worth of goods from the United States each year, according to Reuters.
“I’d like to be in a position where I can say they’re delivering on commitments, or more of their commitments, and be able to lift some of it,” Biden said at a press conference in late January. “But we are not there yet.”
Trump began his controversial and costly trade war with China when he levied tariffs on 50 billion dollars products made in China. Trump has upped the ante over time in response to Beijing’s retaliation over US-made products.
American companies have paid nearly $125 billion in tariffs since 2018. The tariffs cover thousands of products made in China, from televisions to shoes, solar panels, bicycles, fishing tackle , clothes and toys.
Certain US import taxes have been selectively reduced on an ad hoc basis through exemptions, on a case-by-case basis. US importers are now calling for action on a united front.
Nearly 200 industry groups have called on Congress and the Biden administration to “resolve the ongoing trade war with China” that has increased inflation, weighed on U.S. businesses and “has negatively impacted their ability to invest in their businesses, hire more American workers, and stay globally competitive.” “, according to the business group Americans for Free Trade.
The companies call for a “transparent and fair opt-out process at all levels that would help ease the economic burden on American businesses and consumers.”
It is a sort of unilateral tariff disarmament. The idea may be that the Chinese will match us and buy more American goods and services through a heated trade war.
Experts say this would not solve the U.S.-China trade imbalance or supply chain issues overnight. This would help alleviate what businesses see as an injustice, in addition to the inflationary pressures that importers face. And that would benefit fast-growing American industries that use Chinese components.
Eric Pasi, an executive at IPS Solar in St. Paul, one of Minnesota’s oldest companies in a fast-growing industry, said the solar development and installation industry also needs duty relief. customs duties on imported Chinese solar panels.
“Supply continues to be low, prices jumped 20-30% at a time when the Biden administration wants to increase clean energy adoption,” Pasi said.
“Most solar companies assumed tariffs would expire in a more favorable regulatory environment,” he said. “We are at an inflection point with the climate crisis where we need to act boldly over the next decade. Without major federal policy supporting the energy transition, we will continue to see slower growth than necessary, especially if tariffs are reapplied.” ‘
President Joe Biden on Friday extended tariffs imposed by former President Donald Trump on most solar panels imported from China and other countries. But in a nod to his efforts to fight climate change and boost clean energy, Biden ruled out tariffs on so-called bifacial solar panels, used in large-scale utility projects. It also doubled an import quota on solar cells — the main components of panels that go to rooftops and utility sites — to 5 gigawatts, allowing for more imported cells used by domestic manufacturers.
The Biden administration said last fall it would reinstate some tariff waivers in China. More than 2,000 exclusions have been granted under the Trump administration, but only 549 are eligible for another extension by Biden.
Thousands of businesses are seeking relief, according to the Americans for Free Trade group.
Calling for a transparent and meaningful tariff exemption process, the group said it has mustered the support of more than 140 members of Congress.
“Congress must act,” the group said in a statement. “We therefore urge the House to include language in the ‘America Competes Act’ that would require [the U.S. trade representative] to restore a meaningful process of exclusion. »
The Associated Press contributed to this report.