How U.S. and China Tariffs Are Rippling Through U.S. Industries

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from The Wall Street Journal,

Makers of whiskey, cheese, auto parts and more are contending with the U.S.-China tariff battle.

The 25% tariff the U.S. imposed on Friday covers more than 800 products manufactured in China, from pipe valves and aircraft parts to microscopes, or $34 billion in imports from China last year.

Some U.S. manufacturers say the tariffs will make their companies less competitive with foreign rivals by increasing their costs of importing components they use at U.S. assembly plants.

“Every component we procure from China is on the tariff list. It feels like a self-inflicted wound,” said Austin Ramirez, chief executive of Husco International Inc., a Waukesha, Wis., maker of hydraulic and electro-mechanical gear for automobiles and construction machinery. “The tariffs put us at a disadvantage relative to competitors in Japan and Germany.”

The products Husco sells in North America are built at plants in Wisconsin and Iowa, but components for them come through a global supply chain that Husco “spent decades developing,” Mr. Ramirez said. Suppliers in China accounted for a third of Husco’s cost for parts last year.

At the same time, some businesses welcome the changes. The latest tariffs are part of the Trump administration’s strategy to counter what officials see as unfair subsidies and other practices that allowed imported Chinese steel, aluminum and scores of other manufactured items to gain a cost advantage over U.S.-made products. Imports of steel from China have slowed to a trickle under the weight of U.S. tariffs that have driven up prices.

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