This story originally aired on “Marketplace Morning Report” on May 22. Listen to Marketplace Morning Report each weekday at 6:51 am and 8:51 am on South Carolina Public Radio.
The manufacturing sector relies heavily on imported products, which means it’s on the receiving end of the Trump administration’s tariff policies.
S.L. Munson and Company is a manufacturer in Columbia, South Carolina, that makes precision tools for other manufacturers. Company president Lyman Munson said the company imports components from Europe, which means he has to pay a 10% tariff on those imports.
“We’re writing a check every week now on shipments coming in,” he said.
Munson added that the company can’t absorb that 10% tariff. But passing that cost along to customers hasn’t exactly been easy.
“We’re getting some pushback,” Munson said. “Some companies are offering to negotiate. We have another customer who today said, ‘We’re not going to pay any tariffs.’”
Last month, manufacturers surveyed by the Institute for Supply Management said demand for manufactured goods contracted.
“And if you look at the comments, 86% of our panelists this past month have cited tariffs,” said ISM’s Susan Spence.
Manufacturers also said they’re reducing production and employment.
“People were saying, ‘We’re not backfilling. We’re not replacing people.’ And a fair number of the comments were around, ‘We continue to do layoffs,’” she said.
That said, we haven’t seen any mass layoffs happen in the sector so far this year, according to Scott Paul, president of the Alliance for American Manufacturing.
That’s because businesses are reluctant to make any big decisions since the president’s tariff policies have changed so much, he said.
“Uncertainty is the enemy of making capital investments, of making permanent hiring, and of making plans for growth in the future,” Paul said.
Paul added that we still don’t know what tariff policy is going to look like a month from now. And until we do, he said the manufacturing sector is going to keep postponing those kinds of decisions.