Jul 11, 2018 - 5:00pm

‘I’ve Lost my Competitive Advantage:’ 3 Ohio Small Businesses Hurt by Tariffs


Intern, Strategic Communications

Bill Adler thought this was the year he’d be able to bring more jobs back to his home state. But with steel prices up about 50%, he’s now worried about paying the workers on his current payroll.

A Cleveland native who owns metal-parts maker Stripmatic Products, Adler hopes that customers won’t pursue a cheaper, non-American alternative to his company. But he knows that hope isn’t worth much in the marketplace.

If the tariffs remain in place, “I’ve got to find another way to make a living,” Adler tells The Washington Post. “It’s going to be an ugly scenario if it doesn’t end quickly.”

Adler, and more than $5.7 billion in Ohio exports are vulnerable due to the emerging trade war. Many of the nearly 1.5 million Ohio residents whose jobs depend on international trade could be impacted. They are the collateral damage. And the potential harm to America’s industrial and agricultural heartland is about to get much worse.

The news of retaliatory tariffs has already begun to affect industries around the country. From manufacturing to agriculture, business owners are coping with the changes to come.

And the blow is particularly hard for small businesses, which, unlike some multinationals, can’t rejigger their global supply chains to route around tariffs. For many, the international blustering, posturing and gamesmanship means rising costs and eventually layoffs.

Here are three Ohio businesses struggling to cope with the trade war:

1. Stripmatic Products

Adler worries that rising steel prices will pinch his employees’ bonuses and profit-sharing checks. 

U.S. steel prices have risen by about 50% since January and are now 50% higher than in Europe. The most recent U.S. Chamber + USG Commercial Construction Index shows higher material costs have suddenly become a substantial concern for contractors. These recent trade moves are creating great uncertainty in the business community, and uncertainty is the enemy of investment.

“If it wasn’t for the increase that came on because of the threat of tariffs, then I honestly believe we’d be supplying more products domestically,” Adler said. “This directly affects my life, my employees, my investments.”

“Our customers source on a global market,” he said. “I’m going to be at least 30% to 40% disadvantaged on steel.... I’ve lost my competitive advantage.”

2. Staber Industries

Bill Staber, who owns washing machine and drying cabinet manufacturer Staber Industries in Groveport, OH, says the tariffs are taking a toll on his business.

Staber says his cost for aluminum has more than doubled – a cost he’s been absorbing so far. He says he uses a consumer grade of aluminum that’s imported because most American aluminum mills don’t make it. “And you put the tariffs on the stuff coming in – I mean what you expect is going to happen with the price – through the roof,” Staber said.

“I was able to buy cold rolled steel for high 30s, low 40s, and now it’s into the high 50s low 60s since fall of last year,” Staber said.

3. Bernie Kosar

Former Cleveland Browns Quarterback turned farmer Bernie Kosar worries that a 25% tariff imposed on his exports will hurt his 400-acre soybean production. And he’s not alone. Soybeans are Ohio’s largest crop and the state’s top agricultural export, with about 40% of those exports ending up in China. Around $1.4 billion of Ohio soybeans were exported last year.

“So many farmers out here are almost living crop to crop, year to year, month to month," Kosar told News5Cleveland. “At the end of the day when the price point comes at harvest time it's a smaller revenue number then you'd like."

Prices of soybeans, which recently surpassed corn to become the largest U.S. crop in terms of acres planted, recently fell to their lowest level in almost a decade, according to an index compiled by the Minneapolis Grain Exchange. It’s clear the tariff war is to blame.

"I think that kind of lack of certainty definitely causes issues," he said.

To learn more, visit www.thewrongapproach.com to see a map showing how states are affected by tariffs from China, the European Union (EU), Mexico, and Canada.

About the Author

About the Author

Max Nelson
Intern, Strategic Communications

Studying political communication and business administration at The George Washington University, I work at the intersection of politics, business, and communications.