Tariffs Are a Business Savior to Some, Inflation Trigger for Others
At the Kitchen & Bath Industry Show in Las Vegas in 2005, an American kitchen cabinet maker was faced with unfair Chinese competition face-to-face for the first time.
A Chinese man was selling cabinets using the American business owner's marketing brochure.
Paul Wellborn, the owner of Wellborn Cabinet, recognized the Chinese man—he had visited Wellborn's factory in Alabama not long prior, posing as a prospective customer. Wellborn confronted the competitor.
"He just laughed and said: 'We sell Gucci purses. We make all this stuff, and nobody can do anything about it,'" Wellborn recalled.
Wellborn said this encounter provided him an "incentive" to "fight for what's right." He paid about $14,000 in legal fees to ensure the man would stop using Wellborn brochures. Then, almost 15 years later, when he realized that his business was at risk due to Chinese cabinet dumping, he sought tariffs for self-protection.
That's when he crossed paths with former President Donald Trump. In 2017, he met with Trump in Milwaukee regarding those challenges.
During this election season, Trump has repeatedly mentioned the kitchen cabinet industry as a beneficiary of tariffs he implemented during his first term.
The Republican presidential nominee said, if reelected, he would impose a universal 10 percent tariff on all imports and a 60 percent tariff on those from China.
Tariffs have been a contentious issue in this election.
When announcing the new rates in May, President Joe Biden said the tariff increase would protect American industries from "China's policy-driven overcapacity that depresses prices and inhibits development."
During the annual meeting week of the International Monetary Fund (IMF) and the World Bank in late October, Treasury Secretary Janet Yellen reiterated her concerns regarding China's industrial overcapacity. She said China had yet to solve the fundamental issue she emphasized during her trip to Beijing in April—that China was producing more than its domestic demand and dumping cheap products worldwide.
Meanwhile, voters have mixed views.
Trump has continued championing tariffs on Chinese goods, despite the criticism.
"The most beautiful word in the dictionary is tariff," Trump told the Economic Club of Chicago on Oct. 15. "It's my favorite word."
At the same event, he said he met a cabinet maker who told him, "Sir, China and South Korea are building kitchen cabinets for a third of what I can make them ... I can't compete."
A few years later, the same person told him, "You saved my company when you did the tariff, and you saved thousands of jobs. My company is now doing very well."
By 2018, China had taken over 40 percent of the market. That year, cabinet imports from China topped more than $4 billion in the $10 billion industry.
The same year, Wellborn spoke to Sen. Richard Shelby (R-Ala.), who advised him to file his case. Shelby said that many people were upset about China, according to Wellborn.
Wellborn said he visited Washington almost weekly during the one-year fight, and other cabinet companies did the same.
"I really felt good when we won our case," he said.
Wellborn told The Epoch Times that all the effort he and others had made for almost four years had helped.
"It helped all the American families. That makes me feel good because all these families here still have jobs. These are our friends and families."
The Chinese man at the 2005 trade show came to his mind. "If you feel like you're fighting for what's right, you know you don't give up," he added. "You never give up."
Wellborn said he's not against Chinese people in China, but he disapproves of the regime-driven unfair competition. Chinese products are cheap and look good, but they don't last long, he said.
He pointed to the chair he sat on in his company's conference room at the headquarters. The chairs had lasted 50 years, and they only needed new covers.
Economists generally agree that tariffs would cause price increases, and the cost of tariffs is usually borne by U.S. importers and consumers. Where they disagree is whether Trump's tariffs are inflationary.
"Just like 2016, Wall Street and so-called expert forecasts said that Trump policies would result in lower growth and higher inflation," Brian Hughes, a Trump campaign senior adviser, wrote via email to The Epoch Times.
"The media took these forecasts at face value, and the record was never corrected when actual growth and job gains widely outperformed these opinions."
From the perspective of national security, the cost of tariffs may be necessary.
According to the Kitchen Cabinet Manufacturers Association, tariffs worked for the cabinet industry.
Betsy Natz, the organization's chief executive officer, said that importers' stocking up on Chinese imports before the tariffs went in place in 2020 "only delayed the effectiveness of the relief by a matter of months."
"The tariffs are now doing their job at keeping unfairly traded imports of Chinese cabinets out of the U.S. market," she told The Epoch Times, adding that the monthly imports from China were $160 million at their peak in 2018, compared to the current run rate of $2 million.
She said cheaper imports would likely extinguish the domestic industry and eventually result in higher prices in a market monopolized by foreign players.
In 2019 and 2020, the main opponent to the cabinet tariffs was the American Coalition of Cabinet Distributors (ACCD), which represented the importers.
For the pro-tariff trade organizations, the fight goes on.
The current tariffs are scheduled for a routine five-year review next year. The review will determine whether the levies will be revoked or kept for another five years.
"We strongly believe that the tariffs need to remain in place at this time," Natz said.
