Hartford Business Journal

www.HartfordBusiness.com • May 20, 2019 • Hartford Business Journal 7 CT companies brace for new fallout from U.S.-China trade war By Ana Radelat CT Mirror T he U.S. trade war with China has already taken a toll on Connecti- cut companies and threatens to take a bigger bite out of a wide swath of state businesses — from dairy produc- ers to manufacturers like Stanley Black & Decker. On May 13, China announced it will raise tariffs on $60 billion in U.S. goods in retaliation for the Trump administration's latest decision to increase duties on $200 billion worth of Chinese products. The U.S. stock indexes plunged as the trade war between the world's two largest economies intensified. But President Donald Trump says a tough line is necessary because the Chinese government is ripping off American consumers and businesses by unfairly subsidizing Chinese com- panies, forcing technology transfers from U.S. firms and flooding global markets with cheap goods. Even before the latest escalation, the impact of the trade war had been felt in Connecticut. State companies are trying to assess the impact of the latest trade battle. "It's a fluid situation," said Joe Budd, spokesman for the Connecticut Business & Industry Association. China is Connecticut's sixth largest export market, purchasing $943 mil- lion in commodities from state com- panies in 2018. France is the largest purchaser of goods made in Connecti- cut, followed by Germany and Canada. As of June 1, some of those goods made in Connecticut will become more expensive — and less attractive — to Chinese consumers as Beijing imposes new tariffs on them. The tariffs would range from 5 percent to 25 percent. Meanwhile, the imported steel and aluminum Connecticut manufactur- ers rely on has become more expen- sive as the U.S. imposed tariffs on those metals earlier in the trade war. New Britain-based Stanley Black & Decker told investors last month that tariffs had increased the "headwinds" that have buffeted the company. CEO James Loree said his company raised prices to help offset steeper input expenses. But even that did not make up for the higher cost of mate- rial, he said. "If the tariffs go away, that's a pretty significant reduction in head- winds," Loree said. But now instead of relief, the com- pany may feel stronger headwinds. Another Connecticut company, Groton-based Garbo Lobster, lost a significant portion of its business since China doubled tariffs last year on live U.S. seafood in retaliation for U.S. levies on Chinese imports. Garbo Lobster was forced to close its facility in January. Meanwhile, Connecticut's dairy pro- ducers benefited as U.S. sales to China increased 17 percent in the first half of 2018, helping to raise the price of milk and cheese. But those sales dropped 33 percent in the second half of the year after the Chinese imposed retaliatory tariffs on American dairy products. China said it would target American agricultural products when it imposes its new levies on June 1, provoking concern in the nation's dairy industry. Connecticut's aerospace industry, which includes helicopter maker Sikorsky, jet engine manufacturer Pratt & Whitney, and dozens of smaller companies that make airplane components, is also anxiously await- ing China's next step. "Global industry would be best served by a prompt, negotiated end to this dispute rather than a delay in reaching a resolution, which risks triggering ever-escalating retaliatory tariffs," said Dan Stohr, spokesman for the Aerospace Industries Association. "We urge both sides to come together in good faith negotiations to reach an agreement that best serves the goal of free, fair and sustainable trade." Connecticut consumers will also feel the impact of the trade war, as hundreds of Chinese-made imports — from dog collars to computers — be- come more expensive as tariff costs get passed along to consumers. 14 Bobala Road 3rd Floor Holyoke, MA 01040 Tel: 413.536.3970 www.WAdvising.com Headquarters 280 Trumbull St 24th Floor Hartford, CT 06103 Tel: 860.522.3111 One Hamden Center 2319 Whitney Ave, Suite 2A Hamden, CT 06518 Tel: 203.397.2525 One wrong click or a weak password can cause a security incident or data breach. The impact can be devastating. Make a Commitment to Cybersecurity Today Whittlesey's Cybersecurity Assessment (CSA) will help identify your cyber risk level. Call a Whittlesey Expert! 860.524.4433 61% of data breach victims are businesses with under 1,000 employees. 1 1 2017 Data Breach Investigation Report, Executive Summary – Verizon ASSURANCE | ADVISORY | TAX | TECHNOLOGY Stanley Black & Decker CEO James Loree. PHOTO | HBJ FILE

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