Business reactions to Biden Administration tariffs vary widely

Sabri Ben-Achour Jun 26, 2024
Heard on:
HTML EMBED:
COPY
Biden is keeping many Trump-era tariffs and introducing new ones, including lithium ion batteries, electric vehicles and feeding tube parts.  Spencer Platt/Getty Images

Business reactions to Biden Administration tariffs vary widely

Sabri Ben-Achour Jun 26, 2024
Heard on:
Biden is keeping many Trump-era tariffs and introducing new ones, including lithium ion batteries, electric vehicles and feeding tube parts.  Spencer Platt/Getty Images
HTML EMBED:
COPY

President Joe Biden has announced a range of tariffs over the last two months. He’s keeping many of the Trump-era tariffs on, and introducing new ones, including lithium ion batteries, electric vehicles and feeding tube parts. 

Businesses across the U.S. have been offering their take on the tariffs to the office of the U.S. Trade Representative over the last month. We spoke to a few.

For CEO Ed Richardson, new tariffs on Chinese magnets and steel would be great.

“The tariffs would help balance the playing field,” he said.

Richardson heads Thomas & Skinner, based in Indianapolis, which makes high performance magnetic materials that go into medical equipment, for example. Some of those products require specialized steel. Something he says China subsidizes, giving it an unfair advantage.

“We only use domestic steel, that’s what our customers prefer — in some instances, require,” he said. “The tariffs will make our pricing more competitive with producers who use the Chinese steel.”

But one state up, in Michigan, Steven Weichel is very frustrated with the new tariffs on a material called tungsten carbide, which his company Lincoln Precision Carbide uses to make cutting tools used in manufacturing.

“Basically aerospace, automotive, John Deere, Harley — anything that needs carbide cutting tools to what they’re making,” he said.

The tariffs are going to make his tools more expensive.

“All of a sudden, we’re going to become uncompetitive and people will start buying elsewhere, out of the country,” he said.

And Weichel said, there aren’t any producers in the U.S. who make the materials he has to get from China. So, he said, those tariffs are protecting nobody.  

“Where you stand depends on where you sit,” said Bill Reinsch, senior advisor at the Center for Strategic and International Studies. He said some industries may find ways to adapt, others will raise prices, and others my fail. In a sense they are paying the price for protecting or developing other industries, deemed more critical. 

The key question, Reinch said, is whether those protected industries will then improve or stagnate. 

“Tarrifs, if you keep them on for a very long time, they end up stifling innovation in that sector,” he said.

But some of the sectors these tariffs are designed to protect — batteries, electric vehicles, medical equipment — are also getting incentives to improve or reduce reliance on China. 

“Tariffs are just one layer here,” said Reva Goujon, a director at Rhodium Group. “There’s still a lot of competition in these areas, and urgency. Especially when it comes to these clean tech segments where demand is rapidly increasing and there’s a lot of work to do.”

The message from these tariffs, she said, is clear: unwind from China as fast as you can.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.