Mainebiz

V O L . X X X N O. X X V I I I D E C E M B E R 1 6 , 2 0 2 4 12 M A N U FAC T U R I N G M aine manufacturers from craft bever- age makers to industrial suppliers are bracing for disruptions from President- elect Donald Trump's declaration of war against imports from China, Mexico and even Canada — the state's largest trade and investment partner. Trump threatened a blanket 60% tariff against China during the campaign, upping that by 10% after winning the election on a platform to put "America first." He added 25% tariffs on Mexico and Canada over illegal immigration and drugs to the playbook, which would flout a regional trade accord that he negotiated during his first term. e arsenal also includes 100% tariffs on the nine-nation bloc of BRICS countries (including China) should they create a currency to rival the U.S. dollar. But in his cabinet selections, the president-elect sent mixed signals. While there are trade hawks on the team, Trump picked a hedge fund manager wary of across- the-board tariffs as Treasury secretary and an old-school internationalist to run the White House economic council. ose rivals are likely to duke it out over policy. While it's impossible to predict whose prices will go up and whose exports will go down if Trump makes good on his threats and countries retaliate with taxes on U.S. goods, Maine manufacturers — even ones with diversified supply chains — know it won't be business as usual over the next four years. Take ree of Strong Spirits, a small Portland distillery with a growing line of ready-to-drink canned cocktails that obtains all of its materials from U.S. sup- pliers. However, since the business buys cans from a vendor in St. Louis that gets aluminum from China, co-founder Dave McConnell is bracing for higher costs if tariffs are raised. He also fears stiffer prices for other materials, as happened during the pandemic when other distill- eries which couldn't get glass from China "sucked up all the domestic glass," putting small producers like his at a disadvantage. "Subsequently, those distributors went back to buying from China, but I worry that kind of knock- on disruption is going to both reduce our availability [of supplies] and drive up costs," says McConnell, whose business is staffed by eight full-time employ- ees and six or seven part-timers. "Tariffs are such an 18th or 19th century tool to apply in a global econ- omy. It just seems nonsensical to me." Larger manufacturers on alert No matter what happens under Trump, larger manu- facturers are also bracing for a bumpy ride. ey include Auburn Manufacturing Inc., a Mechanic Falls-based maker of high-performance textiles for extreme temperature protection which relies on exports for 20% of sales. Compared to last year, exports are up 35%. While the company does not import any raw materials directly, some originate in other countries. For starters, Kathie Leonard, Auburn Manufacturing's president and CEO, has questions about U.S. dealers stockpiling Chinese products similar to her company's, which would "hurt our sales in the short term." However, she adds, "my main concern is the threatened Trump tariffs on imports from our good neighbors, such as Canada and Mexico," the company's biggest export markets. S O U R C E : Observatory of Economic Complexity MAINE EXPORTS & IMPORTS (AUGUST 2024) TOP EXPORTS AI R C R AFT PAR TS : $63.7M C R U S TAC EANS : $49M LABOR ATOR Y "R EAGANTS ": $36.9M I NTEGR ATED C I R C U I TS : $17.3M KAOLI N-C OR R U GATED PAPER : $13M TOP IMPORTS R EFI NED PETROLEU M : $206M U NS PEC I FI ED C OM M ODI TI ES : $16.3M ELEC TR I C I TY: $16.2M PETROLEU M C OKE: $12.3M S AWN WOOD: $11.9M TOP EXPORT DESTINATIONS C ANADA: $162M JAPAN: $33.4M GER M ANY: $27.1M TU R KEY: $16.4M C H I NA: $14.9M TOP IMPORT ORIGINS C ANADA: $383M C H I NA: $17.7M GER M ANY: $13.1M VI ETNAM : $9.41M FI NLAND: $8.29M F O C U S P H O T O / T I M G R E E N WAY Maine's manufacturing sector represents 10% of the state's GDP and 63% of exports, according to the Manufacturers Association of Maine. TARIFF TURMOIL How proposed trade taxes might affect Maine manufacturers B y R e n e e C o r d e s

• Cover