Earlier this year, Michael Fairbrother was closing in on a huge deal: a contract to send 100,000 bottles of mead—a wine-adjacent alcoholic beverage made from fermented honey—to a distributor in China.
Landing the $750,000 contract would have been a game-changer for Moonlight Meadery, the New Hampshire–based business that Fairbrother started in his garage eight years ago. Already recognized as one of the best breweries in the state, it would have opened a huge new market for for its products. It also would have hired at least six new employees and bought new equipment to meet the new obligations, he says.
Then the trade war came.
President Donald Trump slapped tariffs on steel and aluminum imports from around the world, then followed up with another round of tariffs on various Chinese-made goods. China responded with a range of tariffs that mostly targeted agricultural products—including those, such as mead, that are made with honey.
“We had gone through multiple rounds of evaluation, and we were getting to the final point, negotiating down to the penny,” Fairbrother tells Reason. “The conversation at that point went dry, so I followed up to see how things were going. They said with the tariffs happening, they were taking their business to Poland.”
Trump’s trade war has many costs that can easily be measured, like the job losses triggered at places like the Mid-Continent Nail Corporation, or the jobs at Harley-Davidson that could be shifted overseas. But there are hidden effects too—costs that won’t show up in a ledger. Jobs that could have been created but never were, as shifting trade policy changes businesses’ decisions about where to invest and build. Or, as in the case of Moonlight Meadery, causes prospective buyers in China to take their business elsewhere.
“Basically, the second runner-up got the contract because of the increase in cost,” says Fairbrother.
Instead of protecting American jobs and businesses—as the White House claims it is trying to do—Trump’s tariffs (and the predictable response they have triggered from America’s biggest trading partner) have limited businesses’ ability to grow.
Sen. Jeanne Shaheen (D–N.H.) brought Moonlight Meadery’s circumstances to the attention of U.S. Trade Representative Robert Lighthizer during a hearing on trade policies last week. What’s the plan, she asked, to address the costs of tariffs on small businesses?
“The president is very sympathetic and I, personally, am very sympathetic,” said Lighthizer. “It certainly is not our plan to have small business or agricultural or anyone else in America feel the brunt of a change in trade policy which is designed to make the U.S. stronger and richer.”
But if that’s not the plan, one might reasonably ask what the plan actually is. Before erecting tariffs, Trump proclaimed that a trade war would be “good and easy to win.” Peter Navarro, director of the White House’s National Trade Council, predicted that no country would retaliate to American tariffs.
Each day seems to bring new evidence of just how inaccurate those claims were. Today China announced another round of retaliatory tariffs aimed at $60 billion worth of U.S. imports, with rates ranging from 5 percent to 25 percent. That means another set of American businesses face the prospect of reduced access to Chinese markets. Like Moonlight Meadery, they might miss out on a chance to expand their sales, hire more workers, and grow their business.
“Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties,” the Chinese government said in a statement, according to a translation by CNBC.
Meanwhile, Trump is threatening to impose tariffs on literally all Chinese imports. The two sides are growing farther apart, and the prospects of a deal to end the escalating tensions seem to be fading. Indeed, Chinese officials say they don’t even know what concessions the White House trying to get.
Until there’s a plan, and until the trade war comes to an end, more businesses will get caught in the crossfire.
At the end of our conversation, I ask Fairbrother what would he say to Trump if he had a chance. He chuckles and then pauses, like he’s holding back what he really wants to say.
“I’d just love to see some wisdom from his years on this earth,” he finally offers. “Instead of all this.”
from Hit & Run https://ift.tt/2n9gPe1
via IFTTT