[B]URLINGTON — It’s been four years since Kate Whelley McCabe founded the Montpelier-based Vermont Evaporator Company, which makes sap evaporators used to make maple syrup. The business has been successful, and she was hoping to be profitable this year.
But then the news of the Trump administration’s tariffs on steel and aluminum hit.
“Everything we buy is metal, from the fasteners and fittings to the barrels and stainless steel that we use to make backyard sap evaporators,” she said. “My suppliers are telling me that this year…that my inputs are going to cost anywhere between a single digit percentile to 30 percent more than they did last year.”
“And this was the year I was supposed to make money,” she said.
Whelley McCabe was one of a handful of Vermont business owners who expressed disdain at the Trump administration’s trade policy — specifically, the administration’s tariffs — at a meeting with Rep. Peter Welch, D-Vt., in Burlington Thursday.
The Trump administration put tariffs on steel and aluminum earlier this year, which resulted in retaliatory tariffs from Vermont’s three largest export markets — Canada, China and Mexico. The administration also put tariffs on a variety of Chinese goods.
But business owners at Thursday’s roundtable said the tariffs are hurting their companies by raising costs on supplies they need. This ultimately lowers their profits and leads to less growth and, in some cases, higher prices for customers.
Welch said that a Democratic takeover of the House of Representatives in the November midterm elections could alleviate some pressure from Republicans who are also concerned about the administration’s trade policy but are currently afraid to counter Trump.
He said that a Democratic Speaker of the House could hold hearings with business owners being affected by the tariffs.
“This blunt instrument of across-the-board tariffs are having these collateral consequences are hurting jobs, and doing the damage that we are trying to avoid, means we have to take a hard look at it,” he said.
One of these businesses being affected by the tariffs is South Burlington-based Logic Supply, an IT company that employs 120 Vermonters.
Lisa Groeneveld, the company’s co-founder and co-owner, attended the event and said while it is too early to tell what specifically the impact the tariffs will have on her company, customers will likely see higher prices.
“Tariffs just obviously impact profitability,” she said. “And in decreasing profitability, it limits a company’s ability to pay higher wages, to expand staff, to expand plant and equipment.”
Groeneveld said that while she was optimistic when the Trump administration said it would address China’s unfair trade practices, tariffs have caused significant peripheral damage. She said that computer components have not been manufactured in the United States in the last 30 years and tariffs are just shifting jobs from China to other South Asian countries.
The Lake Champlain Regional Chamber of Commerce hosted the roundtable. Tom Torti, the chamber’s president, said he has not heard from any local businesses which have said the tariffs have been beneficial for them.
“The biggest takeaway I had today is the clarity around unintended consequences on small and medium businesses across all sectors,” he said.
Colchester-based Hazelett Corp. produces machines used in manufacturing, and uses steel and some aluminum in making those machines. David Hazelett, the company’s president, said that the company gets steel from France. While the company tried to work with U.S. producers in the past, they couldn’t provide the quality Hazelett needed.
“It would be so impractical, as to be impossible, to get it from anywhere than where we’re getting it from,” he said. “And we’re paying a 25 percent duty on it.”
Hazelett said that the tariffs are having the opposite effect on his business than the Trump administration had hoped.
“It’s forced us into, for the first time our company’s history, to starting to have some parts made in China to sell to our customers in order to retain their business,” he said. “Parts we would have made here, we’ll lose all together unless we have them made in China.”
One the smaller-end of the scale, Whelley McCabe was hoping to be able to re-invest profits in product development, facility upgrades, reducing carbon footprint by going from diesel-powered equipment to electrical equipment and hiring more staff.
“Before tariffs I’m sort of on track for meeting that timeline, and being able to do those exciting things,” she said. “There’s a big question mark right about whether that will happen for me this year, or whether it will happen that all.”
The Trump administration is using a “national security” exemption to administer the tariffs without congressional support. Welch said the term “national security” was meant to be used in urgent military situations.
“I’m feeling pretty secure that Canada hasn’t turned on us yet,” he said.
David Alward, Canada’s consul general in Boston, said during an appearance at UVM Wednesday that Canada is the United States’ “closest neighbor, ally and partner from a security perspective.”
“So when the U.S. administration came out and said, because of national security, we’re doing this to Canada, it was a little bit like a punch in the gut,” he said.
As consul general, Alward represents Canada in all of the New England states except Connecticut. From 2010 to 2014, he was the premier of New Brunswick, a Canadian province which borders Maine.
While the roundtable mostly focused on tariffs, Alward’s talk focused on the trade agreement that is replacing NAFTA, called the “United States-Mexico-Canada Agreement.” The Trump administration reached a trade deal with Canada Sept. 30 after a year of negotiations.
Alward said that it was time for the North American Free Trade Agreement to be modernized, and Canada was happy with the final deal.
“Canada believes it will be good for Canadian citizens, for companies and, importantly, for workers.,” he said. “We believe it will be good for U.S. companies and workers, and Mexican companies and workers as well. And it will allow us collectively to compete with the rest of the world. “
While Torti said he was glad an agreement had been reached, he thought the United States could have gotten a better deal. And after a contentious period of negotiations, Torti said it could take a generation to repair the personal relationship between the United States and Canada.
Alward said the negotiations included some give-and-take. For example, Canada gave U.S. dairy farmers slightly more access to the Canadian dairy market. But Canada will have more access to the U.S. cotton and peanut markets.
Additionally, Canada was able to keep an independent trade dispute mechanism in place which the United States had aimed to eliminate. Canada was also pleased that the deal is set to expire after 16 years, instead of the five the United States originally proposed.
“The new agreement, for Canada, it provides continuity, it provides stability,” he said. “From an investment perspective, whether its the U.S. side, Canadian side, Mexican side, [all] need a sense of continuity and stability and know the rules of the game.”
