President Donald Trump has once again paused a sweeping tariff plan he’d been threatening to impose, even as lawmakers, business owners and consumers were in the process of figuring out how to live and do business with them.
The Associated Press reported Wednesday that President Donald Trump announced he will put a 90-day pause on the tariffs he’d planned to impose on scores of counties — all except for China, which now has its imports to the U.S. taxed at 125%.
The pause follows a massive dip in the stock markets, according to the AP.
This would not be the first time Trump has reversed, slowed or changed course on tariffs.
The same day Trump announced the latest pause, the Vermont House Committee on Commerce and Economic Development, along with the Senate Committee on Economic Development, Housing & General Affairs held a joint hearing about the tariff situation with Canada, speaking to everyone from state economic officials to Canadian business association leaders.
“Tariffs present a significant risk of making every mile of fiber we build and every customer we connect more expensive,” said Kurt Gruendling, vice president of marketing and business development at Waitsfield and Champlain Valley Telecom.
The company is a family-owned rural telecommunications business that’s been around for 121 years, said Gruendling. These days, it brings broadband internet to sparsely populated areas.
“One of the most significant, immediate challenges we face today is the impact of federal tariffs and the cost of equipment and components we depend on,” he said. “We do not manufacture the highly specialized electronics used in our network. Items like optical line terminals and customer premise optical network terminals, these are electronics that we use to deliver broadband.”
He said that while these parts are made in the U.S., the materials they’re made with are not.
“Tariffs risk increasing the cost of doing business substantially. As is the case with many other goods and services in the economy, we do not yet know the precise scope of what will be passed along to buyers of telecom equipment,” he said.
The company is already dealing with rising costs in health care and other aspects of its business. He said it has increased the size of its inventory in anticipation of the tariffs, but this move also comes with costs and risks.
Renoun Skis CEO Rob Golden said his company employs about 10 people full-time in Vermont and has a gross annual revenue of $2 million. It makes skis using a patented material, but the skis are made in Canada. Building its own factory in the U.S. would cost about $30 million, and having the skis made overseas would either cost the company its patent or be too expensive.
He said there are no contract manufacturers in the U.S. Renoun could work with, either. The company’s Canadian manufacturer has also perfected the technique for making the skis, so Renoun has no interest in finding a new one.
According to Dan Kelly, president and chief executive officer of the Canadian Federation of Independent Businesses, his country’s small- to medium-sized businesses aren’t fans of Trump’s approach to international trade.
“What I can tell you is that we have seen a massive drop in small business optimism in Canada since the announcement of U.S. tariffs, and then, of course, Canada’s retaliatory tariffs were put in place. In fact, we have never seen our optimism drop as much as has happened in the last month. It’s, in fact, at a lower point than during the immediate aftermath of the terrible 9/11 tragedy, it’s lower than during the 2008 financial crisis, it is lower than at any point during the pandemic right now among small firms in Canada, so this is pretty big,” he said.
Kelly said that 16% of his organization’s members export directly to the U.S. while 49% import from it.
He said that some Canadian companies are considering manufacturing in the U.S. but many are looking elsewhere.
“Companies that shipped to the U.S. for years are now looking at serving other Canadian provinces, other farther-flung parts of our country, and international markets,” he said, adding that about half of Canadian Federation of Independent Businesses members now view the United States as an unreliable trading partner.
“I’ve been doing this for 31 years, working in different roles at my organization; I would never, ever have contemplated a moment when small businesses in Canada would feel that the U.S. market is unreliable,” he said.
Lindsay Kurrle, secretary of the Vermont Agency of Commerce and Community Development, said she’s hopeful Vermont and its Canadian business partners can weather the tariff situation as they did the pandemic.
She said that Gov. Phil Scott has organized an inter-agency team to advise him on tariffs.
Kurrle said that announcements and changes from the federal government are happening often and quickly. At one point, she said, it was thought that there would be a 10% tariff on Canadian energy, which would impact all Vermonters. There was a pause announced on that batch of tariffs as well, but the agency went and modeled the impacts all the same.
“All of this is to say that now, as of April 2, we’re in a different place. Our energy, largely, is not going to be subject to tariffs as long as we can demonstrate that it is originating in North America,” said Kurrle.
She said that regardless, some energy imported to Vermont will be affected by tariffs should they be in place.
“There’s a lot of uncertainty, and businesses thrive on predictability and certainty, and that we don’t have right now, but what our agency can do is be there to support them through this,” she said.
Goods that have 50% of their origins in North America are still under the United States-Mexico-Canada Agreement (USMCA), said Tim Tierney, director of recruitment and international trade at the Agency of Commerce and Community Development. Companies making these products have to self-certify that they qualify. Many companies are not aware of this, he said.
According to Tierney, there are some Canadian companies that were contemplating a move to the U.S. before the tariffs were announced, but the tariffs might encourage them to do so sooner.
Fauna Hurley, a congressional staffer for Sen. Peter Welch, D-Vt., said the senator has been opposed to Trump’s tariffs.
“Canada is Vermont’s largest trading partner and last year trade with Canada accounted for 35% of Vermont exports, 67% of our imports, and 56% of its total trade. One in four businesses in Vermont relies on trade with Canada,” she said.
She said that Welch has been meeting with Vermont business owners to hear their concerns and has joined efforts in Congress to repeal Trump’s tariffs, as well as curb the president’s ability to unilaterally impose them without input from lawmakers.
Welch commented Wednesday afternoon on Trump’s decision to pause certain tariffs, stating, “President Trump’s decision is an acknowledgement of what we’ve said from day one: nobody wins in a trade war. Tariffs are a tax on Vermont businesses, farmers, and families, and this administration’s on-again, off-again trade orders are causing chaos and instability for Main Street and Wall Street alike. Vermont cannot afford the current tariffs, and we certainly cannot afford these so-called ‘reciprocal’ tariffs to go back into place. Congress needs to steady the ship and reassert our trade authority.”
keith.whitcomb
@rutlandherald.com