Nine weeks before a presidential election with major implications for global trade, American companies remain as split as ever about whether the tariff barrage the US unleashed against $300 billion of imports from China is punishing their fiercest economic rival or backfiring at home.

In factories and shops around the country, finding complaints about cheaper Chinese competitors is easy — but reaching a consensus on how to combat them is harder. While import taxes offer a protective shield for some businesses, they’re damaging to others, driving up input costs that consumers ultimately will pay for.

The Biden administration in May proposed modifications to US tariffs on goods from China, including 100% levies on electric vehicles. Those received more than 1,100 public comments and are still under review by the US Trade Representative’s office, which said Friday that it expects to make a final determination in coming days.

Outside of Washington, a broader debate over the tariffs — which were initially imposed by then-President Donald Trump starting in 2018 — spans producers of goods ranging from industrial machinery to picnic wares.

A Wisconsin-based maker of hydraulics and electro-mechanical components for tractors and cars says tariffs cost them millions of dollars on material they need from China. Meanwhile, a Virginia-based maker of compostable take-away containers and cups says that Chinese alternatives have snatched business away.

Not even the game of golf is spared.

The country’s two largest golf cart makers say they need steeper tariff rates to protect them from cheaper Chinese imports. Club Car LLC and Textron Specialized Vehicles Inc., both based near Augusta, Georgia, in June asked the Biden administration to place a 100% tariff on golf carts and other low-speed, often battery-powered personal vehicles made in China — putting them on par with the US tariff on regular Chinese EVs.

Soaring Costs

But for a smaller manufacturer, tariffs can hit hard.

Brett Jackrel runs Florida-based Moto Electric Vehicles, which makes golf carts in the US using American-made components while importing rolling chassis from China. The company’s products include emergency golf carts and wheelchair buggies that are popular with ambulance companies, hospitals and high school athletics departments.

Jackrel’s worry? That any tariffs on the material he needs would send his costs soaring.

“Is it going to affect sales? Absolutely. Consumers will pay for tariffs,” he says. “My wheelchair golf carts are helping people who are physically bound to wheelchairs move from site to site.”

The reality of winners and losers is evident across the economy and underscores the trade-offs facing whoever wins the White House in November, in a race where both parties want to recalibrate trade with China.

Candidates’ Positions

Trump has promised to enact a 10% across-the-board tariff on all imports and 60% duties on Chinese goods should he win. He said in an Aug. 19 interview that tariffs were a great negotiating tool, and that the levies he imposed didn’t cause a huge spike in inflation.

Vice President Kamala Harris has yet to lay out her positions in detail, but has in the past spoken of the need for trade deals that support workers. Her campaign declined to comment. 

Since the tariff hikes were unleashed six years ago, anecdotal evidence suggests US dependence on China is declining, though it’s the bigger companies that have had more wherewithal to adapt. 

Williams-Sonoma Inc., which by its own calculation is the 11th-largest container importer in the US, has reduced its reliance on China-sourced goods to 25% from 50% of all its imports in 2018, according to Jeff Howie, executive vice president and chief financial officer. 

If tariffs are expanded, “we’re prepared to reduce it further,” he said on a conference call last month.

For smaller companies, though, it’s not clear that tariffs are helpful. And economists say they help stoke inflation.

While the US trade deficit with China in 2023 fell to its lowest level in 13 years as imports dropped, factors such as pricing and the pandemic have skewed those numbers. At the same time, Chinese producers have reduced the impact of US duties by shifting production to more neutral nations, like Vietnam and Mexico.

“For all the anti-China rhetoric and competition among national industrial policies, dislodging China as a major manufacturing hub is highly unlikely in the medium term,” according to a report last month by Lazard Geopolitical Advisory. “While Chinese exports to the US have fallen, they are rising elsewhere — China now exports more to Belt and Road Initiative countries than to the European Union, Japan and US combined.”

Undeterred, Treasury Secretary Janet Yellen this year chided China for “unfair” treatment of American and other foreign companies. Her department has identified three “warning signs” of overcapacity in China, including one that industrial capacity is rising faster than global demand.

Among those companies feeling the heat is Terravive, the Virginia maker of disposable and compostable food service products. The company, whose clients include large retailers, stadiums and corporate offices, has 10 direct employees but supports more than 1,000 jobs through its US-based manufacturing and supply chain.

China ‘Dumping’

Business is good — but competition from China is real.

“They are dumping product every single day,” said Julianna Keeling, Terravive’s founder and chief executive officer.

In a recent tender, the company missed out on a multi-million-dollar contract after a Chinese competitor offered its wares at a fraction of what Terravive could offer. “They were just charging the freight to ship that over,” she said. “Our No. 1 hurdle for growing our business is artificially cheap stuff from China. If there is a way to balance that out, we are 100% for that.”

For Austin Ramirez, tariffs are cumbersome and expensive. He’s president and CEO of Husco, the Wisconsin company that makes components for vehicles in its manufacturing sites in the US and around the world. He says tariffs on the Chinese-made plastics and machine components that Husco needs have cost him millions of dollars.

Husco has worked with its Chinese suppliers to shuffle production to locations including Southeast Asia in order to escape tariffs.

“We have had several Chinese suppliers that have built new factories with our help outside of China to supply the components that we need,” Ramirez said.

Tariff Headwinds

Uncertainty over trade policy weighs on companies in ways beyond the direct impact of tariffs, according to Nicole Gorton-Caratelli, a trade expert at Bloomberg Economics.

“Through their effects on prices, tariffs affect firms’ investment, procurement and hiring decisions,” she said. “This is true not only when tariffs are applied, but also in times of tariff policy uncertainty as firms base these long-term decisions off of their expectations over future policy.”

For now, businesses can only plan for what might be ahead.

Tom Coble, a vice president at Hartzell Hardwoods, one of the largest US producers of walnut lumber used in high-end furniture, is looking for ways to shift operations and supplies should another volley of tariffs be unleashed. The hardwood industry was hit hard by tariffs earlier in the trade war.

“If either administration were to put in new tariffs, it would have an incredibly negative and detrimental impact on our industry once again,” he said, adding that decisions on spending and hiring are on go-slow mode. “I am holding off until we see what happens in November.”