Tariffs Bring Hope, Caution in Heartland

WICHITA, Kan.-Donald Trump's exact plans to raise tariffs remain a mystery, even to Phil Ruffin, a close friend and business partner of the president-elect.

Ruffin has Increased tariffs could boost business for Harper Trucks, a small hand-truck manufacturer owned for more than four decades, or end up raising costs of parts the factory imports from China. (A hand truck, sometimes called a dolly or a hand trolley, is a small, wheeled cart used to move heavy objects.)

Tariff policy could be critical for American manufacturers such as Harper, fighting to survive. Harper's sales volumes have fallen in recent years, which Ruffin blames on cheap hand-truck imports, largely from Vietnam. Tariffs stand to make Harper's madein-America products more attractive by making foreign goods more expensive through a tax paid by importers.

"That'll make us more competitive," Ruffin said of tariffs. "But will that get us any more business? I don't know, I'm not sure about that."

Trump on the campaign trail proposed a 10% to 20% tariff on all imports and a tariff increase on China to at least 60%. More recently, he threatened to impose a 25% tariff on goods from Canada and Mexico and an additional 10% tariff on Chinese imports.

Tariffs, which are meant to help U.S. manufacturing, among other goals, also raise an even larger question for the American economy: Are lower-wage manufacturing jobs worth fighting for? Harper, like many manufacturers, already struggles to hire workers. And the range of outcomes it faces shows the complex and often contradictory ripple effects of tariffs for American manufacturers enmeshed with global supply chains.

Outlier in an empire

The hand-truck factory is an outlier in Ruffin's empire of casinos and hotels. Ruffin, 89 years old, bought Harper, which has been around almost as long as he has been alive, in 1981-long before he became a billionaire. Ruffin owns Treasure Island on the Vegas Strip and co-owns the Trump International Hotel Las Vegas with the president-elect. Harper, he told the Wichita Eagle in 2019, is a "pimple on my butt."

Harper employs about 120 people. Signs throughout the factory are written in English, Spanish and Vietnamese.

Workers use machines to shape steel and aluminum into the components of the hand trucks. The pieces make their way through welding, painting and assembly, then are packaged for shipping. Products leave the factory with red, white and blue stickers saying "Made in the USA with pride."

Domestic manufacturers remained the largest supplier of hand trucks to the U.S. through 2014, according to U.S. International Trade Commission reviews. But by 2019, imports from countries outside of China, primarily Vietnam and Taiwan, overtook domestic producers in market share.

In recent years, Vietnam emerged as a major winner in Trump's first trade war, becoming a magnet for Chinese manufacturers looking to get around tariffs. That explains why the bosses at Harper are cautiously optimistic about Trump's proposal to add tariffs on all imports.

"I would take a tariff on Vietnam if it made the playing field equal," said Harper's senior vice president and general manager, Chris Squires. A mug in his office reads, "Don't blame me I voted for Trump." He doesn't think a 10% tax on imports from Vietnam is likely to move the needle. But a 20% tariff might make Harper more appealing to the retailers that buy hand trucks.

Advocates of tariffs say duties can help bolster U.S. industries, respond to other countries’ trade practices and bring in revenue for the government. They say tariffs can help make the U.S. economy less reliant on other countries.

Winners and losers

A U.S. International Trade Commission report found that Trump’s 2018 tariffs on steel and aluminum reduced imports, increased U.S. production of those products and were followed by the announcement of new domestic investments by steel and aluminum companies.

The same report found that production fell for downstream manufacturers that use steel and aluminum. Some studies found that higher costs for parts and retaliatory tariffs hurt domestic producers, outweighing the benefits of tariffs to other parts of the manufacturing industry.

“I worry about the unintended consequences,” said Mike Rose, Harper’s controller.

Harper imports wheels and casters from China and buys other pieces of small hardware sourced abroad, so it anticipates those costs to go up if tariffs increase. It is in the process of switching some of its wheel purchases to a U.S. maker, but doesn’t expect to be able to source all of its parts domestically.

Harper raised prices when tariffs from Trump’s first term increased costs, and is prepared to do so again to meet its target profit margin if Trump lifts tariffs further.