Battleground state businesses feel the impact of trade war
As President Trump stumps in Pennsylvania, businesses see pluses and minuses.
President Trump says other world leaders often congratulate him on the U.S. economy and say they want to do the same at a ‘Keep America Great’ rally in Hershey, Pennsylvania.
In Pennsylvania, its top industries suffer whiplash as the state’s economy flourishes but industries like manufacturing and agribusiness get caught in the middle of President Trump's ongoing trade fights overseas. As a battleground, Pennsylvania will play a critical role in Trump’s re-election efforts while he potentially faces off in 2020 against a home-state challenger, former Vice President Joe Biden who grew up in Scranton, Pennsylvania.
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Pennsylvania hit record low unemployment numbers this past spring and has a rising per capita income that is nearly $6,000 dollars more since Trump became president. But some of the state's top industries are feeling the brunt of tariffs.
Pennsylvania is home to the most food processing plants in the country – and is the top producer of canned fruits and vegetables, potato chips, and chocolate. Many of those plants use aluminum to package their products from cans to foil wrappers - leaving costs to process food products exposed to recent tariffs against imported metals like steel and aluminum. The state was one of the top four biggest importers of tariffed metals from January to June this year – importing more than $1.1 billion worth of the metals.
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Feesers Food Distribution helps supply prepared foods to businesses up and down the east coast and has been a part of the Pennsylvania economy since 1901. Feesers' COO Todd Kaufman tells FOX Business a rise in tariffs on imported products has helped drive demand to domestic goods. "We got to supply products at a competitive price and the right quality of course so with the tariffs sometimes it affects whether we go with a domestic product versus an import product of the same quality. But what we've seen overall is not a huge price increase."
But trade unpredictability around the implementation of tariffs has put some producers in a tricky spot. "We have to be careful. We don't want to take a position on something that ultimately might get rolled back, and we end up with higher cost of goods than we really need," Tom Brandt, VP Purchasing at Feesers Food Distributors tells FOX Business.
It’s not just big business bearing the weight of Trump’s tariffs – small businesses are shouldering the burden too.
Scott Kocevar, owner of In-Gear Cycling and Fitness in Hummelstown, Pennsylvania, tells FOX Business his business has been a victim of the trade war. "Tariffs have affected our business. We had an increase with all the bicycles that were coming out of China," according to Kocevar. "Some of the companies have actually moved production from China to Taiwan, Hungary and even to Germany."
Kocevar tells FOX Business the rise in prices is difficult enough but the change in production plants has hurt as well. "We usually have a pretty steady flow coming through but some of the bikes that they moved to Germany are coming a little bit slower right now."
One industry that has thrived during President Trump's tenure is natural gas, which has benefitted from a rollback of regulations and also a positive message from the White House taking leadership on energy independence.
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"I think bringing it to the attention that this is something that would benefit everyone, create a lot of jobs, and make the country really competitive on an energy basis, has been very beneficial," Bony Dawood, President of Dawood Engineering, Inc., tells FOX Business. "And I think a positive view of that industry is helping."
Construction is also thriving in Pennsylvania according to Dawood, "we've seen a steady increase, a lot, a lot more confidence. I get personally involved in the residential home building industry so we've seen strong activity steady activity. So the demand is there and people are I think investing in the future."