Over the last few days, I have received many member calls, texts, and emails about how the recently announced tariffs from President Trump would impact our industry. While I have tried to respond to all of these inquiries, I thought it would be beneficial to share my thoughts in writing via this blog.
First, let me say that tariffs are taxes pure and simple. As we stated in our member alert yesterday, the proposed tariffs will raise chemical prices by approximately $18 billion. The tariffs will impact both the chemical distribution industry and its customers. Nearly 5,000 full-time equivalent (FTE) chemical distributor jobs are at risk due to the higher prices. Including businesses that supply chemical distributors, and those that depend on re-spending by direct and supplier firm employees, these tariffs could lead to a total of over 22,450 fewer FTE jobs and almost $1.4 billion in lost wages and benefits when applied to the broader economy. These impacts will reverberate throughout the economy and supply chain. The cumulative effect of the tariffs on chemical products alone will increase import costs to consumers by $15.7 billion, and the American economy will be nearly $4.7 billion smaller. This is certainly no laughing matter especially when you consider the macro impact on the global and U.S. economies let alone the direct and dire impact it has on our industry.
While the economic impact cannot be understated, President Trump is utilizing the tariffs as a negotiation tactic. They are being used with the intention of improving the United States’ economic prospects and security concerns. The problem is the uncertainty that exists between when a new tariff is issued to the time it is rescinded. That uncertainty makes the importation of chemical products very challenging. Many of you have legitimate questions and concerns about the ultimate timing and implementation of the tariffs and the possibility of exclusions.
Our role at ACD is to provide as much support as we can to ensure that our members can comply with rapid policy changes. In the case of these new tariffs, we must expect the worst (i.e. the 30-day extensions expire and result in an effective date in early March) and thus prepare our members with an arsenal of concise information to ensure compliance. While we may not be able to answer every question, we will – to the best of our ability – advise from both a policy standpoint, and with outside support, a legal perspective. With this in mind, the Alliance announced today it will host a webinar that will provide more details on these tariffs with the assistance of outside counsel from Thompson Hine LLP. Please make sure you register for this webinar that will take place tomorrow, February 5, 2025 at 12:00 p.m. (EST).
While the actions described above are in reaction to the tariffs to provide tangible support to our members, many have rightfully inquired how the Alliance will respond from a policy standpoint. We are deeply concerned about the promulgation of these tariffs due to the severe economic impact on our industry as articulated above. As I have learned from representing you all for the last 12 years, businesses require certainty in order to plan, invest accordingly, and not waste time, money, and resources. ACD must proceed carefully when it takes this message to Capitol Hill and the White House. Congress is abundantly aware of the impact these tariffs have on businesses. There are not many Republicans or Democrats in either chamber that would dispute the impact tariffs have on businesses, especially small, family-run ones. And I would not hesitate to say that if I were to privately ask all 535 House and Senate members if they oppose tariffs over 500 would say yes. Now, I say “privately” because House and Senate Republicans, in particular, are averse to speaking out against the actions coming from the White House, specifically any positions issued by President Trump. This stance is understandable considering the current political climate here in the Swamp with a new Administration that has a fair amount of tailwind behind it. Add in the success that President Trump has had thus far in using tariffs as an aggressive negotiating tool there is a reason most groups are reticent to oppose them or openly oppose the Administration.
So ultimately, when asked if ACD supports these new tariffs the answer is no. Our job as the Alliance is to hold the government accountable for policies that hurt our members. We will continue to articulate the impact of these tariffs on our industry to the Administration, Capitol Hill and the media.
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