'We're at the whim of the economy,' Jaffrey manufacturer tells ShaheenBy MEGHAN PIERCE
Union Leader Correspondent
April 04. 2018 9:55PM
JAFFREY — China’s swift response to proposed tariffs and stock market volatility should be a clear indicator to President Donald Trump that his plans for steel and aluminum tariffs are a bad idea, U.S. Sen. Jeanne Shaheen said Wednesday.
“If I were a steel producer, I’d be happy,” Val Zanchuk, president of Graphicast, told the Democrat after she toured the Knight Street production plant that employs 22. “But if I’m a steel user ... I won’t be happy.”
Graphicast makes small components for 80-plus businesses with a raw zinc and aluminum material — not the bars, plates and sheets of steel and aluminum that Trump’s tariff targets, Zanchuk said. But the tariff would affect a lot of industries Graphicast does business with.
“We’re totally dependent on the state of the economy of those businesses,” he said. “We are pretty much at the whim of the economy.”
(Related story, Page B1.)
Shaheen said in response to Trump’s tariffs, China has proposed billions in trade tariffs on U.S. goods. It has had an immediate impact on the stock market, she said.
“One of the things that the market doesn’t like is uncertainty,” Shaheen said. “And it’s the same for businesses; if a business doesn’t know how to plan that affects the bottom line.”
Reuters reported that Wall Street recouped steep initial losses on Wednesday, with the benchmark S&P 500 and Nasdaq composite closing more than 1 percent higher and the Dow industrials just below that mark.
Michael Arone, chief investment strategist at State Street Global Advisors in Boston, told Reuters the market overreacted.
“These tariffs won’t be implemented for a little while. It gives both sides time to negotiate, which I think is the strategy for both the U.S. and China,” Arone said.
Shaheen said Wednesday she remains concerned about how small businesses in New Hampshire will fare.
“Nobody benefits form a trade war,” Shaheen said. “We have a growing aerospace industry in New Hampshire and the tariffs that were announced yesterday or today — we think will have a real impact on Boeing and other aerospace companies ... We have 100 small manufacturing companies that provide parts to Boeing.”
“And they are all going to be paying more. It just ripples down the road,” Zanchuk said.
He added: “The more tariffs that get imposed by the Chinese, the more the Dow is going to drop.”
China has been a currency manipulator, Shaheen said. But Trump’s tariffs are not the way to go about addressing that, she said.
“This is not the way we want to encourage businesses in America,” she said.
Zanchuk pointed out that China is not the only country that the U.S. imports steel from.
“Canada, Mexico, Brazil, Japan — there are all kinds of places that are not at odds with us,” Zanchuk said.
“He talks about wanting to go after the Chinese and yet in steel imports China is number ten or 11 on the list. So why beat up everyone else to get to the Chinese and have to back-track on all of it.”
On Wednesday, oil prices slipped to a two-week low as the speed with which Beijing responded to U.S. measures — within 11 hours, Reuters reported — raised the prospect of a spiraling dispute that could crimp the global economy, including the demand for crude.
Boeing and Caterpillar led a slide in big U.S. manufacturers and technology companies that likely would bear the brunt of the U.S.-Chinese dispute.