What Does a Trade War Mean for Westchester?

Recent tariffs can complicate business for local merchants. Here’s how.



If you’ve unfolded a newspaper in the past year, or clicked through online news sites, President Trump’s varied taxes on foreign goods (and other countries’ retaliatory tariffs) have likely made an appearance.

So: Has the trade war claimed any casualties here in Westchester?

For most businesses in the county, the recent economic ado hasn’t had too deep an impact, for better or for worse. Some of the most talked-about tariffs — on steel and aluminum — aren’t likely to aid any local merchants, experts say. “There are no steel mills or aluminum mills in Westchester, so there is no direct beneficial impact locally,” explains Nimish Adhia, an associate professor of economics at Manhattanville College in Purchase.

Adhia notes that businesses that buy steel and aluminum — say, auto companies or homebuilders — will be adversely affected. “But since the vast majority of Westchester businesses are producers of services, the overall negative impact on the local economy will be small,” he says.

Westchester consumers, though, might experience slightly lighter pocketbooks: “Tariffs, by raising both foreign and domestic prices, tend always to hurt the average consumer,” Adhia explains. “Homes, cars, soda cans, and infrastructure will be made more expensive by the steel tariffs.” Also by aluminum tariffs, which directly impact a couple of high-profile businesses right here in the county. Purchase-based PepsiCo is raising prices on its food and beverage products, according to Bloomberg, due to, among other factors, higher aluminum costs. Meanwhile, Heineken USA, in White Plains, may well be affected, too.
 

“The Trump tariffs... have exacerbated price volatility and supply-chain unpredictability in an already turbulent marketplace.”

—Leo Wiegman, Executive Vice President, Croton Energy Group


Even if a small number of local businesses are impacted, the tariffs are still a big deal for those specific merchants. Among the affected are those in Westchester’s renewable-energy industry. The US now imposes a 30 percent tariff on imported solar panels. And while this is good news for American companies that manufacture the panels, American companies that purchase and install them aren’t pleased.

“The tariffs have definitely had an impact on solar companies throughout the country, including here in Westchester,” says Nina Orville, principal of Dobbs Ferry-based Abundant Efficiency, a company that helps governments and businesses become environmentally sustainable. More specifically: “The 30 percent tariff has increased the cost of the panels,” Orville notes. This is especially noticeable for the more expensive, higher-efficiency panels, she adds.

Further, Orville notes that price hikes mean equipment dealers now keep smaller inventory on hand. As a result, local businesses experience delays when ordering panels.

The tarrifs have “added an additional measure of volatility in the business,” she laments. “It’s one more challenge in an industry that has generated a lot of employment and is contributing to the transition to clean energy in Westchester.” 

Leo Wiegman runs one of the solar-industry businesses Orville is talking about. He’s executive vice president at Croton Energy Group, a solar-energy designer and installer whose clients are based primarily in Westchester.

“The Trump tariffs on both imported solar cells and on steel and aluminum generally have exacerbated price volatility and supply-chain unpredictability in an already turbulent marketplace,” Wiegman says.

Wiegman sees the tariffs as a net negative: “The tariffs will not save the two US solar-panel [manufacturing] firms that had overpriced product to begin with,” he says. “In the end, the US families or businesses that go solar will pay a bit more.”

Another segment of the local economy that is poised to be impacted is farms and farmers. Tom Deacon runs Fable, an Ossining-based farm that produces everything from squash and garlic to free-range eggs. Fable only sells domestically, so it may appear unencumbered by the retaliatory tariffs countries have placed on American corn, dairy, and other foodstuffs. (Perhaps the most talked about was the 25 percent tariff China placed on American soybeans in July 2018, which prompted billions of dollars in aid from the US government to American farmers.)

“At the moment, we’re not [affected],” Deacon says. But he suspects his farm may be impacted in the future, at least indirectly, if the price of organic chicken feed increases. “Some of the crops we don’t grow, I try to bring in for our customers from other local growers,” Deacon adds. Fable purchases produce from Katonah, New Paltz, and beyond. And if those farms are affected by the tariffs, then Fable could encounter a shortage.

“It could affect availability; it could also affect price,” Deacon says. “Because [these tariffs] are in the early stages, there might be ramifications or repercussions that we have yet to see.”

Andrew Bahrenburg is National Policy Director at the National Young Farmers Coalition, an agriculture advocacy group with 40 chapters in 30 states and Washington DC — including a robust presence in the Hudson Valley and Westchester. The nonprofit provides farmers with “a network to organize, to advocate for themselves… to tackle barriers,” Bahrenburg says. Sometimes, those barriers are tariffs.


The Trump tariffs have increased the cost of solarpanels throughout the country and in Westchester.


Most local members are “small-scale, direct-to-consumer” operations, Bahrenburg explains. So they’re more resilient to tariffs than, say, a sprawling soybean farm. “If you’re relying on your neighbor for selling your produce, then you’re in better shape and not really subject to the whims of the global market,” Bahrenburg says.   Still,  even a small bit of pressure can hurt: “The tariffs are hitting farmers really hard at a time when things are really tough,” Bahrenburg notes. “Net farm incomes across the US were down 50 percent over the past five years — that was before the tariffs.”

Solar and agriculture aren’t the only two industries bracing for impact locally. John Ravitz, executive vice president of the Business Council of Westchester, notes a handful of other sectors will likely be affected.

“In our construction-and-building trade, there are already some concerns,” Ravitz says. “There is concern in some of the retail areas, too.” He adds that negative impacts could range from businesses halting expansions to the laying off of staff.

Even industries not directly linked to tariffs could be jolted. “Westchester has a disproportionate number of globally oriented businesses and therefore will suffer from the Trump administration’s overall anti-globalization drift,” explains Adhia, the economics professor. For example: Local colleges that usually draw students from abroad might see a dip in international enrollment, Adhia says.

At the very least, Ravitz says talks of tariffs and trade wars have put Westchester businesses on high alert. “Everyone is keeping their antenna up,” he says, “and they should.”


Freelance writer Kevin Zawacki is a frequent contributor to 914INC.

 

 

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