WASHINGTON — Andy Marsh’s New York factory is trapped in the Trump trade wars.
As Mr. Trump threatens tariffs on America’s economic allies and its adversaries, many of the domestic businesses that the president says his policies are meant to protect are finding themselves victims of his aggressive approach.
Prices are rising for imported goods, other nations are erecting retaliatory trade barriers, and companies like Plug Power, the manufacturing business that Mr. Marsh runs outside Albany, are facing crippling uncertainty from Mr. Trump’s fickle approach.
It is not the first time Mr. Marsh has felt firsthand the impact of decisions made hundreds of miles away in Washington.
In February, Congress and Mr. Trump gave Plug Power an injection of optimism, by extending a tax credit that was crucial to the manufacturer’s American expansion plans. The credit allowed Plug Power to reduce the price of its fuel cells for trucks and forklifts, and to forge ahead with new hiring.
By May, Mr. Marsh had slowed his efforts to fill more than 10 open positions in Plug Power’s factory as he began worrying that the tariffs on steel and some Chinese products crucial to its business would raise the costs of the components it imports to build fuel cells. So executives had raised the price on their fuel cells, and sales were slowing as a result.
United States Customs and Border Protection had also begun delaying some of those imported components for several days after they arrived from overseas, slowing their trip to Plug Power’s factory floor, Mr. Marsh said. The reason for the delay was unclear, but Mr. Marsh suspected that it could be related to the recent trade upheaval.
Other American companies, such as Ford, have faced delays with their products in China, as customs officials subjected their exports to additional scrutiny once they arrived in that country.
“For us, it’s created uncertainty,” Mr. Marsh said this week, referring to the administration’s flurry of trade threats and decisions in recent months. “I buy a good deal of metal parts and electronic assemblies around the world. I sit, and I’m not really sure what my costs may be and what I should be charging in price.”
Plug Power exemplifies the manufacturers, large and small, that find themselves buffeted by uncertainty from Mr. Trump’s trade agenda. The administration has implemented tariffs on imported steel and aluminum from countries like China, Canada, Mexico and Japan, as well as the European Union. It has threatened tariffs on other Chinese imports, rescinded those threats, and then resumed them. At Mr. Trump’s urging, officials have opened an investigation that could lead to tariffs on imported automobiles and auto parts, many of which come from Canada, Mexico and other allies.
The tariffs already in place are raising the prices of components that many manufacturers depend on and must secure from global supply chains. The threat of other tariffs, and of retaliation from the trading partners Mr. Trump is targeting with his actions, has added an additional layer of unease. Trade groups and executives warn that the uncertainty is undercutting some of the benefit that businesses expected from the tax cuts Mr. Trump signed into law.
Federal Reserve officials frequently cite trade tensions as a threat to investment and economic growth. Minutes from the May meeting of the Federal Open Market Committee said that in many regions of the country, the Fed’s business contacts “expressed concern about the possible adverse effects of tariffs and trade restrictions, including the potential for postponing or pulling back on capital spending.”
Plug Power employs more than 600 people in the United States, including 300 at its factory in Latham, N.Y., where it assembles fuel cells that run on hydrogen. In February, it was poised to continue increasing its investment in the United States, thanks to a bipartisan bill that extends, then gradually phases out over time, a tax credit for fuel cells. Mr. Marsh had been nervous about that bill’s prospects, but when it was approved, he said he felt “really good” about the future of his business.
For much of the spring, armed with the certainty of the tax credit, he was able to raise more capital for Plug Power to invest.
“With stability,” Mr. Marsh said, “I think 2019 would be a breakout year.”
In April and May, though, Mr. Marsh saw the stability of his supply chain begin to erode. Much of what goes into Plug Power’s fuel cells comes from abroad, including fans from Japan, radiators from Canada, tanks from Italy and harnesses from Mexico. One of the company’s suppliers buys raw steel from China.
At first, Mr. Marsh did not worry about the administration’s proposed steel and aluminum tariffs, and its escalating tensions with China. By May, after watching administration officials vacillate on proposed penalties against the Chinese telecommunications company ZTE, Mr. Marsh was more nervous. He hoped to expand Plug Power’s small presence in the Chinese market through a joint venture partnership with a Chinese company, but he worried about possible new restrictions from the administration on American investment there.
“When you have uncertainty,” he said, “you’re not as quick to hire. I’ve been slow.”
Perhaps most important, Mr. Trump’s proposed tariffs on $50 billion worth of Chinese imports included six products that directly affected Plug Power, including certain forklifts.
“If the tariffs are implemented,” Mr. Marsh wrote on May 11 to Robert E. Lighthizer, the United States trade representative, “the more than 600 employees at Plug Power could potentially lose their livelihood, not to mention jobs associated with our customers, supply chain partners and others that support the distribution and sales of our products.”
Plug Power’s supplier that procures steel from China was struggling to give the company reliable price quotes, given the volatility in the steel market stemming from the White House’s wavering tariff announcements. Mr. Marsh, in turn, was struggling to give potential customers a reliable price on his fuel cells. Plug Power ultimately settled on a higher price, to reduce its risk, a move that would most likely reduce the number of fuel cells customers could afford to buy.
Mr. Marsh said he agreed with the administration that the United States needed to do more to deter China from taking intellectual property from American companies, and from heavy government support of industries. But he said he would prefer that America act concertedly and strategically with its allies to apply that pressure.
“I do buy that the U.S. has not been aggressive enough in protecting our interests,” he said, adding that he did not expect that effort to affect his business. “I’ve run companies for 20 years, I’ve had high positions in companies for 30 years. I’ve never thought about trade so much.”
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