Local manufacturers helped by tax cuts, hurt by tariffs

Some local manufacturers say that while the federal tax overhaul has helped their bottom lines, they are feeling the pinch of the trade war with China and are worried about another looming round of tariffs.

President Donald Trump last week once again threatened to impose tariffs on cars and parts imported from European Union, as the two organizations have not yet reached a trade deal. And new tariffs on Chinese goods could start March 1, depending on ongoing talks between the U.S. and China.

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U.S. Sen. Rob Portman, R-Ohio, said tariffs should be for leveling the playing field when a company’s trade practices have been proven unfair. But he said in this case, the national security rationale for tariffs is a step too far.

“Because what happens? These other countries retaliate against us immediately, and they have the total right to to it because we’re not using the statues that have to do with fairness, we’re just saying we’re going to invoke this national security exception to our trade laws,” Portman said.

Portman’s comments came last week when he visited Staub Manufacturing Solutians, a metal fabricator and contract manufacturer in Harrison Twp., as part of a series of roundtables around Ohio with manufacturers and elected officials.

Many of the manufacturers at the roundtable praised the Tax Cuts and Jobs Act — the sweeping federal tax overhaul passed in 2017 — for lowering their taxes and leaving them more money to pay their employees and invest in equipment. But some also voiced concern that those gains are being chipped away at because of recent tariffs that are raising prices on steel and other imports.

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John Tate, senior vice president with Crown Equipment, which makes forklifts, said “while the duties and tariffs have held us back some” the company calculated that its employees have been able to take home an additional $12 million.

“And we have embarked on a $130 million manufacturing expansion, expecting over 550 jobs in Auglaize, Mercer and Miami County,” Tate said.

The tariffs have also hit Ohio hardwood businesses, since China has been one of the industry’s main customers. Greg Muhlenkamp, vice president at Piqua-based Hartzel, which has an industrial fan business and also a hardwood business, the tariff are “hitting the hardwood side really hard.”

Ross McGregor, with Springfield-based Pentaflex, which makes metal stampings and assemblies, said the Tax Act was important for the company, but the steel tariffs are harming the business.

“They are really limiting our ability, and any benefit that we see from the tax cut is being consumed, in many cases, by the steel tariffs,” McGregor said.

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Manufacturing in 14 counties around Dayton

2,476 companies

123,892 employees

$8.8 billion annual payroll

$2.1 billion economic development

$48.2 billion annual sales

Sources: Dayton Region Manufacturers Association, Wright State University Applied Policy Research Institute.

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