WMC survey finds support for tariffs despite business harm

While Paranet Group survey says tariffs among top challenges facing manufacturers

Last updated on November 21st, 2019 at 02:38 pm

Two-thirds of Wisconsin businesses surveyed by Wisconsin Manufacturers and Commerce “strongly” or “somewhat” support tariffs imposed on China even as 47% say the actions are having a negative effect on their business, according to the organization’s semi-annual survey.

Kurt Bauer, president and CEO of WMC, said he was somewhat surprised by the strong support for the tariffs, noting the organization most often hears from members seeking exemptions from the tariffs.

“The U.S. opens its markets to foreign companies with the expectation of reciprocal treatment, which doesn’t always occur, especially when it comes to China,” Bauer said. “The general sentiment expressed in this survey is that something drastic needs to be done to force a change.”

Bauer said prior to the survey he would have expected WMC members to be against the tariffs levied against China.

“In general, they’re against the concept of them,” Bauer said of membership views on tariffs. “Obviously there’s pain involved, but the pain may be worth it.”

He said WMC’s data does not address whether businesses have become more supportive of the China tariffs since they were first instituted, but said that could be the case.

“A year into this, they have figured out ways around it,” he said, noting some companies have shifted production to other countries. “Businesses are clever and they’re adapting to the new world of tariffs. They’d still like to see them go away.”

A separate survey by Wauwatosa-based business development organization The Paranet Group found tariffs as among the top challenges facing manufacturers.

“On again. Off again. Manufacturers need to develop their strategy,” the Paranet survey report said. “Some will use tariffs to positively market themselves, others are dealing with disruptions in their supply chains.”

The report noted that Paranet members are expecting tariffs to be in play until at least the 2020 election because the issue has become so politicized. The organization’s members are also increasingly concerned about doing business with China.

“China is in it for the long haul, planning out at least 2 generations. Decisions made today have the future in mind,” the report said. “The U.S. is out just 2 years and more reactive. This will cause major headaches for U.S.

The Paranet survey also showed some signs of a slowing economy. The number of respondents who said their businesses are shrinking nearly doubled to 10%, although 57% said their companies are growing and 34% are stable.

“While these are solid numbers, they are down from 2018,” the report said. “There is a definite softening in demand.”

Customers adjusting after stockpiling product, tariffs and uncertainty from the political environment were among the reasons for the slowdown cited by Paranet members.

Another recent survey by Chicago-based advisory firm Sikich found two-thirds of manufacturers are preparing for a recession.

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.