The 2018 tax increase on goods from China and other countries coming into the United States continues to hang heavy over Indiana manufacturers.
“It matters very much here for Henry County’s largest private sector employer,” said Nate LaMar, international regional manager of Draper Inc.
Draper is a family-owned plant that produces shading, audio-visual and athletic systems. The company has more than 700 employees and does business all over the world.
“Draper’s products are American-made, right here in Spiceland, Indiana,” LaMar said.
Even so, the company has still seen their costs jump since U.S. President Donald Trump imposed an additional tax called a tariff on steel imports March 8.
LaMar explained that small pieces of the Draper products are created in China and then shipped to the Spiceland plant to be used in the production of the larger end-products.
“Like almost all manufacturers, some small part is likely made in China,” LaMar said. “Because of the global supply chain, that’s just part of it.”
Those small Chinese components cost an additional 10 percent now that the tariffs are in place.
LaMar said if something “drastic” doesn’t change, those tariffs will jump to 25 percent Jan. 1, 2019.
Along with the specific taxes on small imported components, Draper and other Indiana companies saw the cost of their raw materials jump over the past year.
“The trickle down effect has impacted us here at Draper,” LaMar said.
Draper has seen steel prices increase 26 percent and aluminum prices increase 31 percent since September 2017 because of the tariffs and market speculation.
LaMar said the last “tariff war” of this magnitude took place in 1928, a year before the stock market crashed and accelerated the global economic crisis of the 1930s.
“The global supply chain is even more interconnected now than it would have been prior to the Great Depression,” LaMar said.
Working for change
LaMar has been talking with elected officials and policy makers for years about the needs of Indiana manufacturers and the impacts that policies have on companies and their employees.
Since 2003, he has served on the Indiana District Export Council, part of the National Association of District Export Councils (NADEC).
Last month, LaMar was appointed to a regional position and now represents the Great Lakes Region on NADEC’s Trade Policy and Education & Outreach Committees.
The first Trade Policy Committee teleconference took place last week.
LaMar said NADEC is concerned about “bilateral free trade agreements” with other countries. These agreements are different from the “multi-lateral” agreements in the past that were between several different countries or regions.
“The Trump Administration doesn’t like multi-lateral free trade agreements,” LaMar said.
Instead of the Trans-Pacific Partnership (TPP), for example, the U.S. government is looking at a U.S.-Japan bilateral free trade agreement. LaMar said there are also talks about trade agreements with the United Kingdom and the European Union.
As Draper’s international regional manager, LaMar has developed business relationships around the world. Most of his expertise is on trade issues in the Middle East, so that is where he hopes to best serve NADEC.
LaMar said he is really concerned right now with future trade in Turkey and Saudi Arabia, where international relationships are becoming strained following the murder of journalist Jamal Khashoggi.
Keeping the spotlight on Henry County
LaMar does not want international concerns to overshadow the threat import tariffs still create for Indiana workers.
NADEC is encouraging members like LaMar and Draper to bring their Congressional representatives into the local plants.
Senators and representatives need to understand what issues local businesses have with the Trump Administration’s tariffs and what help they need.
“We just need to drive home to them the impact of tariffs on American manufacturers back here in their own districts,’” LaMar said.
LaMar intends to be a part of the solution. He wants to make sure the elected officials in D.C. remember Henry County.
Indiana voters will find out who their next Senator and U.S. Representative will be after the ballots are counted tonight.
“There is a transition right now in Washington,” LaMar said.
Once the post-election dust settles, LaMar plans to start rebuilding the relationships and contacts that he has forged over the past 15 years advocating for Indiana businesses.