'Stop the Nonsense' With Tariffs, Says This New York Manufacturing CEO

Like pretty much every small business in America, the Plattco Corporation doesn't have a direct line to the White House, and CEO Michele Derrigo-Barnes can't call up the president to get special tariff exemptions.

So when I asked Derrigo-Barnes what she would tell President Donald Trump (or his top trade advisor Peter Navarro) if she had the chance, she gave a light chuckle and then took a deep breath.

"Stop the nonsense," she replied. "I would say, 'You're killing the American people.' We've worked hard to get us to a place where we can perform well, and we can take care of our customers, and this is putting that in jeopardy. And the people that we have employed here have really good lives, and you're putting that at stake."

The Plattco Corporation was founded in the late 1890s—that supposed golden age that Trump believes his tariffs will somehow resurrect—and for well over a century, it has been designing and manufacturing industrial valves used by mining companies, power plants, printing presses, and a wide range of other trades.

A valve might be just one small piece of some larger industrial process, but Derrigo-Barnes explains that every valve Plattco makes contains a bunch of smaller parts—a body, an arm, a link, a cover, a seat, a flapper, air cylinders, and ball bearings. Some of those pieces are produced at the company's Plattsburgh, New York, facility, while others are manufactured abroad (largely in China) and imported to New York for final assembly.

That supply chain is now at risk. Goods and raw materials imported from China now face tariffs as high as 245 percent. It is still unknown how American companies that buy products from China will handle those higher costs, or whether shortages will result.

"The pricing is going to kill us," Derrigo-Barnes tells Reason. "We've already seen an impact in our sales."

That's not the only thing. An ongoing expansion of Plattco's in-house manufacturing center and improved foundry is now on hold, as Derrigo-Barnes waits to see how the tariffs will dent sales and the company's bottom line.

Trump and his allies believe tariffs on China (and on virtually all other imports to the U.S.) will promote domestic manufacturing. Many American manufacturers don't seem to share that assessment. "Firms expect conditions to worsen in the months ahead," the New York Federal Reserve noted in its April survey of manufacturers, which showed "a level of pessimism that has only occurred a handful of times in the history of the survey."

Derrigo-Barnes says she understands the underlying goal of the Trump administration's trade policy, but she lives in the real world and also knows that the president can't reorder supply chains with the snap of his fingers.

"I understand the philosophy that we want to have everything American-made, but it's not something that anybody is going to be able to just pick up and do tomorrow," she told Reason.

In the meantime, it will be manufacturers like Plattco and its 55 employees that bear the brunt of the trade war. As in other cases, some of the first victims of the trade war might be these good-paying, blue-collar jobs that Trump supposedly wants to protect. When I ask Derrigo-Barnes to tell me about her company, one of the first things she talks about is Plattco's benefits package, which includes paying 100 percent of all employees' health insurance. It's something she doesn't want to have to give up.

"We allow people to have that work-life balance that makes people be good employees and makes people great at home," she says. "This is really putting a damper on that, and it's scary."

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