Trump’s Trade Strategy Playing Well With Some Manufacturing CEOs

While some manufacturing CEOs and their representatives in Washington are up in arms about President Trump’s increasingly aggressive tariff proposals and other saber-rattling he’s doing while ramping up an apparent trade war with China and even with some of America’s closest economic and military allies, not everyone is upset.

A number of CEOs at U.S.-based manufacturers support—and even applaud—Trump’s logic in attempting to disrupt and perhaps overturn a long-standing global trade milieu that they believe, as the president does, has greatly disadvantaged American companies and exports overall.

“I view what [Trump] is doing as a round of negotiations where he’s attempting to dislodge 30 years plus of trade agreements and a status quo that has brought us to where we are today–which isn’t enviable,” Gregory Owens, Co-Founder and CEO of Liberty Tabletop, told Chief Executive.

Based in Sherrill, N.Y., Liberty Tabletop makes premium flatware and sells it mainly online, making it viable in a business where inexpensive Chinese imports took over the U.S. market and where low-cost Chinese steel is the raw material for about 85 percent of sales in this country.

In a meeting in Washington, D.C., several months ago, Owens said that U.S. Trade Representative, Robert Lighthizer told him China is the biggest trade problem. “The whole situation with the huge trade imbalance between us and China isn’t sustainable and needs to be fixed,” Owens said.

Likewise, Dan Minor, owner and CEO of Cadillac Casting, an iron foundry in Cadillac, Mich., supported Trump’s efforts. The recently imposed aluminum tariffs have made Cadillac’s products–which include steering knuckles, axle components and other heavy-duty parts for U.S. automakers–more competitive with aluminum parts.

Moreover, Minor says the president is only after “full and fair trade. Everybody agrees that we want free trade,” he told Chief Executive. “But we can’t have trade deficits at the levels we do. With his actions and posturing, he’s getting others to the table where we can narrow that gap.”

On the other hand, most business associations have lined up in opposition to Trump’s decision to impose tariffs on steel and aluminum imports from the European Union, Canada and Mexico, labeling it essentially a tax on American consumers and warning of likely retaliation by subject countries. The tariffs, for instance, could cost the U.S. auto industry at least one million in annual vehicle sales, estimated researcher LMC Automotive.

Many CEOs and business groups are also concerned that the Trump administration’s ever-escalating, tit-for-tat spats with NAFTA partners Canada and Mexico, and with rival economic superpower China, will prove counterproductive as well.

“A trade war never benefits anyone, so rather than pursuing a piecemeal tariffs approach, now is the time to seize the opportunity before us and work toward a U.S.-China trade agreement that will benefit American workers for generations to come,” said National Association of Manufacturers President and CEO Jay Timmons in a statement.

David Farr, chairman of NAM and CEO of Emerson Electric, contextualized his approach to the issue in a recent interview with Chief Executive. “The NAFTA program negotiated by President Clinton and finalized by President Bush was a very appropriate trade agreement, but it needs to be refined,” Farr said. “We’ve watched people take advantage of loopholes. It’s important for this country. Ideal in a global world: No one can compete with these three countries when we’re tied together.”

For example, Steelcase CEO James Keane and his company object to the steel tariffs because of what a corporate statement called “negative and unintended consequences that run counter to the administration’s intent.”

Specifically, PolyVision, a division of Steelcase, makes a highly durable and sustainable porcelain-enameled steel to create whiteboards for American schools and universities. To make this specific product, PolyVision requires specialized raw-steel materials and, despite repeated attempts to qualify a U.S. supplier, the company hasn’t been able to procure the steel domestically.

In March 2017, PolyVision received an exclusion for this raw steel material. The company has filed for a similar exclusion based on the most recent tariffs. Yet Steelcase and PolyVision “strongly support measures to ensure a fair and level playing field and are working with other companies and government officials to reach that goal,” the statement said.

Read more: CEO Confidence Falls On Growing Trade War Worries