By Katy Stech Ferek and Josh Zumbrun
WASHINGTON -- Stephen Pelkey says he's scoured the globe to find
fireworks that match the quality of what he buys from China,
without success.
Seeing few alternatives to Chinese imports, Mr. Pelkey has
joined hundreds of other business owners and executives in begging
Trump administration officials to drop plans to slap 25% tariffs on
$300 billion in Chinese imports.
"It would be great if I could just say, 'I'm going to get my
[fireworks] containers from U.S. companies,' " said Mr. Pelkey,
chief executive of Atlas PyroVision Entertainment in Jaffrey, N.H.
"They don't exist."
President Trump contends fresh tariffs are needed to force a
recalcitrant China to end unfair trade practices. As added
benefits, Mr. Trump has said, the tariffs enrich the U.S. Treasury
and can help U.S. manufacturers compete against low-price Chinese
imports.
But with public hearings on the tariff plan set to begin Monday,
the U.S. trade representative's office has already been flooded
with letters from companies like Atlas PyroVision saying they have
few options besides China.
A Wall Street Journal analysis of federal import data gives
weight to those claims. The list of items to be hit by new tariffs
includes 273 categories of goods -- including consumer fireworks,
fishing reels and electric blankets -- for which China accounts for
more than 90% of imports. Last year, $66.3 billion worth of these
items were imported from China.
Window curtain importer S. Lichtenberg & Co. Inc., which
supplies Walmart Inc., Kohl's Corp. and Amazon.com Inc., stopped
sewing hems and rod pockets at its U.S. facilities in 2007.
President Scott Goldstein said restarting that work isn't on the
table.
"I don't even know if we can get sewers or what we would have to
pay them," said Mr. Goldstein, adding that none of the U.S. textile
mills or dye houses that the 300-worker company, founded in 1933
and based in New York, used to buy fabric from are still in
business.
Illinois collectibles maker The Bradford Exchange began using
Chinese workers in 1985 to paint intricate scenery on porcelain
figurines and assemble devices that light up and play music. Now,
more than half of its products are hand-painted or involve
handwork, said Chief Executive Richard Tinberg.
It takes a skilled artisan to paint the figurines that adorn the
four tiers of the company's spinning musical Christmas tree, or to
put together the mechanics inside its "Nightmare Before
Christmas"-themed wall clock, which dangles characters and a
swinging pendulum, Mr. Tinberg said. Both products, made under
licensing deals with the Walt Disney Co., sell for about $200
apiece.
"There are very few people over here who want to do the type of
detailed handwork on products that are sold to the middle class,"
said Mr. Tinberg, whose company records more than $400 million in
annual revenue.
Company officials at baby-gate and bedrail maker Regalo
International LLC told U.S. trade officials that the threat of
tariffs 18 months ago prompted them to look for new manufacturing
partners in Mexico and other foreign countries that may have
pockets of cheaper labor.
But the search turned up short. Vietnam can handle orders for
wood products and textiles but "has very weak infrastructure in
metal fabrication," officials at the Minnesota company said in a
letter. In general, factories couldn't match China's prices or keep
up with production demands.
"It was NOT even close," they wrote.
Strikeforce Bowling LLC, which imports hundreds of thousands of
bowling shoes and bags from China, began searching for alternate
suppliers in the Dominican Republic, Cambodia and Bangladesh soon
after President Trump won the election in 2016, said the company's
president, Bradley Handelman.
But suppliers in those countries wanted larger orders than he
required, he said, so his company continues to source its goods
from China.
In New Hampshire, Atlas PyroVision used to make its own
fireworks. But rising costs forced it to close its factory in 1995,
Mr. Pelkey said, and it now relies almost solely on Chinese imports
to stage municipal fireworks shows and to sell sparklers and other
pyrotechnics to consumers.
According to trade data from the Census Bureau, the U.S. now
imports 86% of display fireworks used in shows from China.
Mr. Pelkey said he has looked for suppliers in countries
including Vietnam, Cambodia, India and Mexico, and has yet to find
one that can make fireworks of the quality he typically sees in
China.
Mr. Pelkey says reviving the dormant U.S. fireworks
manufacturing industry is unlikely, given the high costs of
insurance and the tight regulation that comes with the manufacture
of explosive devices. It would also take years to hire and train a
workforce, he said.
Some manufacturers, however, have filed comments supporting the
tariffs, including car-seat maker Dorel Juvenile Group Inc. of
Columbus, Ind.
The company's 700 workers now produce three million seats a
year, and it stands ready to boost production, Timothy Gallogly,
the company's director of legal affairs, told U.S. trade officials
in a June 6 letter.
"Dorel is confident that its workers can handle additional
capacity," Mr. Gallogly said.
Even so, companies with the ability to increase production in
response to Chinese tariffs are minorities in the industry, said
Kelly Mariotti, executive director of the Juvenile Products
Manufacturers Association. Most baby products sold by U.S.
companies, including car seats, cribs, highchairs, play yards and
strollers, are made in Asia, she said.
Ms. Mariotti's organization is pushing trade officials to remove
baby products from the next round of tariffs, in an effort to keep
them affordable.
"Higher costs for these products will place an unfair burden on
families that will undoubtedly result in fewer babies and toddlers
having access to products critical to their safety," she said in a
statement.
The tariffs have also drawn opposition from broad coalitions of
business groups, including the U.S. Chamber of Commerce and the
National Retail Federation. In a letter to President Trump on June
13, tariff opponents including Walmart, Target Corp. and Costco
Wholesale Corp. said current and proposed tariffs would raise costs
to a family of four by an average of $2,000 a year.
--Anthony DeBarros contributed to this article.
Write to Katy Stech Ferek at katherine.stech@wsj.com and Josh
Zumbrun at Josh.Zumbrun@wsj.com
(END) Dow Jones Newswires
June 16, 2019 05:44 ET (09:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.