Connecticut’s Schick razors receive a waiver in tariff war

Washington – The Trump administration’s new policy on imported steel and aluminum has prompted dozens of Connecticut companies to ask for an exclusion from new tariffs on these metals, but only one, Schick Manufacturing Inc. of Shelton, has as yet received a waiver.

Uncertainty over the new U.S. policy that imposes a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum roiled Wall Street Monday after the European Union hit back with $3.2 billion worth of its own tariffs on American products, including bourbon, orange juice, playing cards and Harley-Davidsons.

The other impact of Trump’s tariff policy, aimed to bolster the domestic steel and aluminum industry, is on U.S. manufacturers, including those in Connecticut, who use imported metals.

“Tariffs work just like taxes,” said Peter Gioia, vice president and economist at the Connecticut Business & Industry Association. “What they do is increase the cost of whatever the tariff is on.”

Gioia said companies are loath to pass along that increased cost to customers, but will have trouble absorbing the added cost of making their product in the long run.

CTMirror.org file photo

CBIA economist Peter Gioia

“They are trying to wage a trade war and win it,” Gioia said of the Trump administration. “But tariffs are a very crude tool.”

Since the Trump administration imposed tariffs on imported steel and aluminum, American companies have submitted roughly 20,000 applications for waivers of the tariffs on individual products.

The Commerce Department is responding slowly.

Schick Manufacturing, Inc., which employs nearly 1,000 people at facilities in Milford and Shelton and is known for its razor blades, was one of the first seven companies granted exclusions to the new steel tariffs by the Commerce Department.

“Exclusions generally are granted if there is no domestic availability and there are no overriding national security concerns with regard to the specific product,” the Commerce Department said.

The other companies to receive the first waivers are Hankev International of Buena Park, California; Zapp Precision Wire of Summerville, South Carolina; U.S. Leakless, Inc. of Athens, Alabama; Woodings Industrial Corporation of Mars, Pennsylvania; and PolyVision Corporation of Atlanta, Georgia.

“This first set of exclusions confirm what we have said from the beginning – that we are taking a balanced approach that accounts for the needs of downstream industries while also recognizing the threatened impairment of our national security caused by imports,” said Secretary of Commerce Wilbur Ross.

Schick is part of Edgewell Personal Care. Lauren Medina, a spokeswoman for Edgewell, said the company had no comment on its waiver.

In its request for an exclusion for its razors to the Commerce Department, Schick wrote “there are currently no similar products in the United States.”

The Commerce Department also rejected 56 tariff exclusion requests from 11 different companies. Among the denied requests was one from Seneca Foods, of Marion N.Y., the nation’s largest canned vegetable manufacturer, which asked that the tinplate it imports from China be exempt from tariffs.

Jamison Scott, executive vice president of Air Handling Systems, a third generation family-owned business in Woodbridge, Connecticut, said the cost of domestic steel has been rising alongside the price of imported steel.

His company makes sheet metal ductwork for industrial ventilators with steel purchased from a service center that obtains the material from big mills and then sells it to small manufacturers.

Scott said the price of that steel, which is mostly made in the United States, has risen by 20 to 25 percent since the Trump administration first said it would impose the tariffs in February.

“I cannot pass on a 20 percent price increase to my customers,” Scott said. “It’s a real problem.”

He said he may be forced to raise his price to cover some of that increase, though.

“It’s definitely confusing for those of us who are small manufacturers,” Scott said of the new trade wars. “We can’t ignore what’s going on in the global economy.”

President Donald Trump has threatened to escalate his tariff war, which has already resulted in turmoil beyond Wall Street.  Harley-Davidson announced plans Monday to move some of its manufacturing offshore, saying the new EU tariffs would add about $2,200, on average, to every motorcycle exported from the United States to Europe.

Trump is threatening to make cars his next major target, saying auto imports are next in line for a 20 percent tariff if the European Union does not remove its own tariffs and trade barriers.

“If [EU] Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” the president tweeted on Friday.