Vermont businesses are weighing in about prospective tariffs.
President Donald Trump threatened to place a 25 percent tariff on goods imported from Canada and Mexico beginning in February. Canadian authorities promised retaliatory tariffs. The proposed import taxes were then postponed until March.
Senator Peter Welch, a Democratic member of the Finance Committee, said although the tariffs were delayed, they remain of enormous concern.
“It has real practical impacts on enterprises, your companies, your ability to do your work,” Welch told the group. “And it’s a combination of A, the uncertainty; B, there’s a real question of how tariffs are applied. Third, the history of this tariff last time around was that those who were well connected and knew how to get to the administration oftentimes were able to work out an exemption. And that will be very tough for Vermonters because we just don’t have that size and scale. And number four, any tariff that was imposed ultimately would have to be passed on to the consumer. So it would increase prices.”
No matter the sector, nearly all businesses and nonprofits attending a roundtable Welch hosted expressed concerns about the impact of potential tariffs.
University of Vermont Health Network Chief External Relations Officer Jason Williams said the health care industry is worried about negative impacts to the cost of pharmaceuticals.
“The ingredients that are used to make pharmaceuticals, about 13 percent come from China and 8 percent of our final pharmaceutical product comes from China. The University of Vermont Health Network spends $400 million a year on pharmaceuticals. This tariff we estimate could increase our pharmaceutical costs alone by 10 percent,” explained Williams. “The second part is generic drugs. Ninety percent of all prescription drugs are generics and we have very little domestic production. Adding a tariff will either lead to drug shortages in the short term or, long term, significant price increases.”
PC Construction is based in Vermont but operates throughout the eastern United States. President and CEO Matt Cooke says since COVID there have been significant cost increases that have curtailed a number of projects including housing.
“We’ve seen a 40 percent increase roughly in the cost of construction. To add another 25 percent on certain materials or equipment would really just further that cost burden and make it even more impossible for projects to become a reality,” Cooke said. “So I’m just concerned in general that it’s going to further stagnate the ability for some of these much needed construction projects to move forward. Beyond the cost side I’m also concerned there’s legal ramifications too.”
H2O Innovation is a Quebec-based company that manufacturers equipment for maple producers. Director of Products and Marketing Kevin Lawyer says the tariffs could be positive for his sector.
“For the general farmer that we sell to and the passionate fabricator that works for our company in the U.S. they look at this as positive. And ultimately I think it creates more of an on par manufacturing versus what we deal with in Canada,” said Lawyer. “I think the general farmer feels like this is good for the U.S. manufacturing market, in maple, versus Canada.”
Vermont Maple Sugarmakers’ Association Executive Director Alison Hope said producers would not be able to fulfill market demand under the tariffs.
“Our industry has grown in production almost 500 percent, 500 percent, over the last 20 years. And these tariffs would go a long way towards potentially slowing that production,” predicted Hope.
President Trump announced Monday 25-percent tariffs will be imposed on all aluminum and steel imports to the United States. Broad based tariffs on Canadian and Mexican imports were postponed until March.
