John Hamer, president of Rodgers Wade Manufacturing in Paris, Texas, faces growing challenges in the wake of tariff changes that are straining US businesses reliant on imports.
US Importers Struggling with Tariff Complexities
For years, John Hamer, the president of Rodgers Wade Manufacturing, has worked tirelessly to supply store fixtures to major retailers like Ross Dress for Less and Ulta Beauty. Based in Paris, Texas, his company designs and manufactures metal fixtures, a product that was, until recently, largely sourced from China. However, the landscape for Hamer and many other importers has dramatically shifted due to complex tariff structures that have added another layer of financial strain.
Previously, Hamer’s company was subject to a significant 70% tariff on metal fixtures imported from China. However, this was just the beginning of a growing challenge for American businesses, as importers now face what has come to be known as “tariff stacking.”
What is Tariff Stacking?
Tariff stacking refers to the accumulation of tariffs that businesses are required to pay on various parts of the supply chain, effectively increasing the overall cost of imported goods. This phenomenon is becoming a central issue for US companies like Rodgers Wade Manufacturing, which depend on multiple parts or raw materials sourced from different countries. As each item on the supply chain may be subject to its own set of tariffs, the cumulative impact can be substantial, increasing the price of end products.
The Impact on US Manufacturers
For small and mid-sized manufacturers like Rodgers Wade, this stacked tariff system has become a considerable hurdle. Many US manufacturers import components and raw materials from overseas to assemble their final products domestically. With each stage in the supply chain potentially attracting a different tariff, costs add up rapidly, causing price hikes on everything from furniture fixtures to electronics.
Hamer explains, “Our costs have gone up across the board. It’s not just about the tariffs on the metal itself but also on the parts we need to assemble. When you add it all together, it really starts to add up.”
The Biden administration has taken steps to modify some tariffs and address the burden on American manufacturers. However, the ongoing changes to tariffs often create an unstable environment for businesses trying to plan for future costs. The unpredictability around tariff policies is forcing manufacturers like Hamer to constantly adjust their business models and find new ways to absorb or pass on these additional expenses.
The Ripple Effect: Cost Increases Across Multiple Industries
The impact of tariff stacking extends beyond metal fixtures. Industries ranging from automotive to consumer electronics, and even apparel, are seeing the same pressures. Companies that rely on foreign supply chains for everything from steel to microchips are struggling to stay competitive in an already challenging global market.
“Every time we turn around, there’s a new layer of tariffs,” said Hamer. “It’s tough to stay profitable when you can’t predict your costs with any certainty.” This uncertainty has prompted many US businesses to consider shifting their sourcing strategies, potentially moving to alternative suppliers in countries that are not subject to the same level of tariffs, or even rethinking their entire supply chain model.
Changes and Pushback from the Business Community
To address the challenges posed by tariff stacking, there have been calls for reforms. Business groups such as the National Association of Manufacturers (NAM) have lobbied for greater transparency in the tariff structure and clearer guidelines on what companies can expect to face when sourcing products from abroad. Some companies are also calling for tariff relief on essential materials that cannot be easily sourced within the US.
Hamer, like many other manufacturers, has been part of this conversation, seeking changes that would ease the burden on small businesses like his. While some relief has come in the form of tariff exclusions for certain materials, these measures have often been temporary, and the long-term outlook remains uncertain.
Navigating the Complexities of US Tariff Policy
As the US government continues to navigate trade policies and tariff adjustments, the business community remains in limbo. The complexities of tariff stacking present a difficult challenge for US manufacturers, with many companies facing difficult decisions about their supply chains and cost structures.
For Hamer and Rodgers Wade Manufacturing, these tariff hikes and the ensuing financial pressures are more than just an inconvenience—they are a significant hurdle to their long-term sustainability. While he remains hopeful that some of the tariffs will eventually be reduced or adjusted, he knows that businesses like his will need to be adaptable to survive in this evolving trade landscape.
Conclusion: The Ongoing Battle for US Manufacturers
Tariff stacking is a growing concern for US importers, with companies like Rodgers Wade Manufacturing at the forefront of the struggle. As more industries are affected, the ripple effect of these tariff policies will likely continue to resonate through the US economy. With manufacturers facing higher costs and uncertain supply chains, the challenge of managing tariff stacking could become a defining issue in the years ahead for many US businesses.