Some businesses on the Western Slope are bracing for the financial impact of President Donald Trump’s tariffs.
Trump announced a pause on his sweeping reciprocal tariffs earlier this month, but that pause is set to end this summer. To learn how some businesses are following trade developments and how they stand to be impacted, The Daily Sentinel reached out to local business leaders who rely on international trade for a pair of stories detailing local impact.
A couple of prominent Grand Junction manufacturers provided a glimpse at their outlooks.
REYNOLDS POLYMER
Grand Junction acrylic manufacturer Reynolds Polymer Technology lends its production to projects all around the world.
The company’s projects include water features in Château Louis XIV in France, Jewel Changi Airport in Singapore and the Palazzo in Las Vegas; scientific and medical technologies like the LZ Xenon tanks in South Dakota and Daya Bay neutrino-measuring equipment in Hong Kong; and the Embassy Gardens Sky Pool in London.
Reynolds Polymer President Trevor Greer said that the company could feel tariff impact in both imports and exports — and see “business cut in half” — as some of the company’s raw material comes from overseas, with Japan, which has found itself in Trump’s tariff crosshairs, playing an important role in supplying materials.
Greer welcomes the pause, but uncertainty continues to cast its shadow over every financial decision the company plans.
“My main suppliers are out of Japan and, on the raw material side, the U.S., so (the pause) was good news there. It will be interesting to see what other countries do on the reciprocal side. Within the European context and broader North America with Mexico and Canada, there’s still some retaliation going on there,” Greer said.
“Right now, we have a big project that’s heading to Germany by the summer. We’ll see where this 90 days gets us and, when that leaves, what ultimately happens. Even that we don’t know. That’s an uncertain problem we’ll be facing, but we’ll see what happens around June, July, August when the product actually leaves.”
Greer said he supports aspects of Trump’s agenda, such as his handling of the southern border, but he believes Trump’s approach to tariffs on a broad level has caused the American brand to “take a hit” by “painting the whole world” with one brush of trade confrontation.
“This is kind of the bull in a China shop that has long-term consequences, in my view, because it hasn’t been strategically thought out. The real focus has been China and (intellectual property), whether it be theft or manipulation. I would say everybody understands this,” Greer said.
“Unfortunately, it’s the collateral damage of your true partners and friends getting swept up in this mess. I think China is straight-up an enemy, not even a quasi-frenemy, so I do understand that point, but picking fights with people you’ve gone to war with and traded with for hundreds of years…. I’m not so sure I agree with the policy there.”
Greer said a concern of his is that, if the country’s reserve currency status is pushed as a result of trade wars, it would lead to collateral damage for American businesses.
He was asked if he believes the Trump administration’s case that tariffs will lead to onshoring more domestic manufacturing. Greer said he doesn’t believe the country has the human capital to hire 10 million new positions and that “bad policy” over the course of decades means the country wouldn’t see a smooth transition into increased manufacturing.
“One thing I think is being missed is that we’ve kind of outsourced our pollution. The big nasty industries have been moved offshore, especially in steel, because it’s very polluting and it’s tough to even hide it. Are we really going to be building steel mills in the states? With the regulatory framework we have, I’m not so sure that will work,” Greer said. “I understand the point, but are we really going to be making Nikes over here? I don’t think so. Should we be building iPhones over here? Yeah!”
Instead, Greer implored the United States to embrace innovation and come up with new ideas for the global marketplace.
“If there’s one thing the U.S. does the best in the world, it’s innovate. I think we need to put those caps back on and keep going,” Greer said. “That’s where the U.S. is, by far, leaps and bounds ahead of everywhere else: on innovation, on creating the next best thing. I think we need to focus on that.”
MOUNTAIN RACING PRODUCTS
The Daily Sentinel spoke with Mountain Racing Products Co-Founder and CEO Tim Fry on April 8, one day before Trump paused tariffs, so he provided the perspective of a manufacturer actively facing tariffs and provided a glimpse into what his company could face this summer should tariffs resume.
Mountain Racing Products (MRP) manufactures high-end bicycle components in Grand Junction and Taiwan. In Grand Junction, CNC machines make parts and cut metal. Inventory from Taiwan is often shipped to Grand Junction for final assembly, and the company also ships parts out of Grand Junction to Taiwan.
Fry, who is also the chair of the Colorado Mesa University Board of Trustees, said that the company was looking at a 10-20% increase in costs.
“The things that we’re seeing from an impact standpoint out of the gate is our raw material we bring into Grand Junction to feed our machines and keep our machines going. We’ve seen an increase between 5% and 15%, depending on the material, on that. That’s an increased cost we either have to absorb as a company or pass along. It’s an increased cost for us to be making that part in Grand Junction,” Fry said.
“We import mostly molded plastic parts and hardware from Taiwan into the U.S. for final assembly, and those are getting hit with 32% additional duty — that’s additional on top of whatever the existing duty rate was — so we’re probably anywhere between 32-42% depending on what item is coming in. There’s very few finished products that we bring in from Taiwan and sell. At the end of the day, when we make a product, the cost of that product is being increased by the material costs to make the parts we make here and the 32-42% duty we’ll see on the parts we have to bring in.”
About 30% of the company’s sales come from Europe. Reciprocal tariffs against European nations, Fry said, would impact the company’s bottom line and potentially impact how many people it employs.
“In our space, most of our competition produces in Asia, so if Europe puts retaliatory tariffs on the U.S., my main competitors would not be impacted by those tariffs because they’re shipping products from Taiwan or somewhere in southeast Asia to Europe, whereas I’m producing in the U.S., so I’m trying to deliver from the U.S. to Europe,” Fry said.
“As a U.S. manufacturer, I’m actually penalized if Europe puts retaliatory tariffs on the U.S. because of the tariffs in place. We’re bracing for that. Will 30% of our revenue dry out because of that?”
Fry said that original equipment sales to bicycle brands as well as bike production volume in Taiwan dropped because uncertainty led to canceled orders.
“The thing I keep telling people is we’re a tiny little company in Grand Junction, Colorado, and we have a global market and a global supply chain. This is complicating every single aspect of the global market and global supply chain. It’s not a simple little thing of producing in the U.S. or producing in Asia or whatever,” Fry said.
“If Europe puts retaliatory tariffs on the U.S., it would make more sense for me to increase my operation in Taiwan so I can get around that tariff. If I want to sell more in the U.S. market, it makes sense for me to increase my U.S. operation. There’s no quick, easy solutions to navigate the challenges of this kind of blanket policy vs. more of a strategic, surgical approach to tariffs.”
Source: https://www.gjsentinel.com/news/western_colorado/what-impact-do-tariffs-have-on-western-colorado-manufacturers/article_b0a655f6-76cc-4455-9251-687e2a30dc7e.html
